DEAR RICH FOLKS: Get Ready For A (Tax) Revolution In Which Your Money Will Be Taken Away

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    Jul 28, 2011 4:53 AM GMT
    From Business Insider by Henry Blodget

    DEAR RICH FOLKS: Get Ready For A (Tax) Revolution In Which Your Money Will Be Taken Away

    There is only one other period in US history in which inequality was as high as it is now.

    That was around 1930, when the super-low tax rates of the late 1920s allowed the richest Americans to coin (and keep) money, and the US economy experienced a brief, euphoric sugar high that ended in the Crash and Great Depression.

    In 1932, when the public anger about the Depression and this colossal inequality reached a fever pitch--and US budget deficits soared--tax rates for America's highest earners began to go up.

    In 1936, they went up again.

    In 1941, with the US saddled with massive Depression and War debts, they went up again.

    In 1945, they went up again.

    In 1946, the nation's highest earners were paying a mind-boggling 91% of marginal income over $200,000 ($2.4 million in today's dollars) to the government. This was up from only 25% in the late 1920s.


    And tax rates stayed that high until the mid-1960s, when they began to come down.

    This massive tax increase on rich people in the 1940s,1950s, and early 1960s, by the way, didn't clobber the economy (contrary to the prevailing current ideology).

    Over those two decades, the economy and stock-market and middle-class boomed. The massive inequality that had exacerbated class tensions in the late 1920s and 1930s eased. America went through a multi-decade prosperous expansion that would later be looked back upon as "The Good Times."

    But those times are now nearly a half-century ago. And now we've just repeated the 1920s all over again.

    In the first decade of the 2000s, super-low tax rates, super-cheap money, massive borrowing, and many other factors fueled an unsustainable sugar-high boom that has since turned to bust. And now the country finds itself saddled with colossal debts (in aggregate, including consumer debts, much higher than those after World War 2), huge budget deficits, and enormous inequality. And tax rates on the richest Americans are still near their all-time lows.

    If history repeats itself, our financial problems will eventually be solved, but not without a lot of time and pain. And part of the solution will likely be much higher tax rates, especially on the richest Americans.

    So enjoy today's low rates while they last.

    Read more: http://www.businessinsider.com/tax-increases-are-coming-2011-7#ixzz1TN9zfnG2
  • brendanmuscle...

    Posts: 593

    Jul 28, 2011 4:59 AM GMT
    Increasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.
  • Webster666

    Posts: 9217

    Jul 28, 2011 5:13 AM GMT
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.





    You are mistaken.
    Your theory is probably true for the poor and possibly true for the middle class.
    But, the rich spend whatever they want to spend, in good economic times and in bad.
    However, for the most part, they only invest.
    After awhile, there isn't much left that you want to buy...
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    Jul 28, 2011 5:51 AM GMT
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.





    The historical record proves very clearly that you're wrong.
    Higher taxes have never done what you allege.
    In fact, higher taxes have a proven track record of leading to a strong economy and budget surpluses.

    You've just bought into a right-wing talking point that has no basis in fact.
  • shoelessj

    Posts: 511

    Jul 28, 2011 6:45 AM GMT
    Godddddd, it must really suck to be super rich. Poor guys.
  • brendanmuscle...

    Posts: 593

    Jul 28, 2011 8:21 AM GMT
    rickrick91 said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.





    The historical record proves very clearly that you're wrong.
    Higher taxes have never done what you allege.
    In fact, higher taxes have a proven track record of leading to a strong economy and budget surpluses.

    You've just bought into a right-wing talking point that has no basis in fact.


    Please take a look at this. I am not saying this with any political bias btw, i am not rich lol

    http://en.wikipedia.org/wiki/Laffer_curve
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    Jul 28, 2011 8:45 AM GMT
    There's no way to determine where you are on the Laffer curve. For all we know we could still be way to the left side of the parabola.
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    Jul 28, 2011 10:11 AM GMT
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.

    The issue with the far left of the left is not really about economics. They are more interested in everyone being the same, even if it is shared misery. They don't want everyone to be better off if the result is inequality. That article reeks of class envy and class warfare covered up as so-called social justice. As the far left sees their influence crumbling, there will be more like articles appearing, and their tone will be bitter, shrill, angry, and unhinged, just like an increasing number of RJ posts (often started by a few who shout their thread titles in all caps).
  • rnch

    Posts: 11524

    Jul 28, 2011 11:36 AM GMT
    Christian73 saidFrom Business Insider by Henry Blodget

    DEAR RICH FOLKS: Get Ready For A (Tax) Revolution In Which Your Money Will Be Taken Away

    There is only one other period in US history in which inequality was as high as it is now.

    That was around 1930, when the super-low tax rates of the late 1920s allowed the richest Americans to coin (and keep) money, and the US economy experienced a brief, euphoric sugar high that ended in the Crash and Great Depression.

    In 1932, when the public anger about the Depression and this colossal inequality reached a fever pitch--and US budget deficits soared--tax rates for America's highest earners began to go up.

    In 1936, they went up again.

    In 1941, with the US saddled with massive Depression and War debts, they went up again.

    In 1945, they went up again.

    In 1946, the nation's highest earners were paying a mind-boggling 91% of marginal income over $200,000 ($2.4 million in today's dollars) to the government. This was up from only 25% in the late 1920s.


    And tax rates stayed that high until the mid-1960s, when they began to come down.

    This massive tax increase on rich people in the 1940s,1950s, and early 1960s, by the way, didn't clobber the economy (contrary to the prevailing current ideology).

    Over those two decades, the economy and stock-market and middle-class boomed. The massive inequality that had exacerbated class tensions in the late 1920s and 1930s eased. America went through a multi-decade prosperous expansion that would later be looked back upon as "The Good Times."

    But those times are now nearly a half-century ago. And now we've just repeated the 1920s all over again.

    In the first decade of the 2000s, super-low tax rates, super-cheap money, massive borrowing, and many other factors fueled an unsustainable sugar-high boom that has since turned to bust. And now the country finds itself saddled with colossal debts (in aggregate, including consumer debts, much higher than those after World War 2), huge budget deficits, and enormous inequality. And tax rates on the richest Americans are still near their all-time lows.

    If history repeats itself, our financial problems will eventually be solved, but not without a lot of time and pain. And part of the solution will likely be much higher tax rates, especially on the richest Americans.

    So enjoy today's low rates while they last.

    Read more: http://www.businessinsider.com/tax-increases-are-coming-2011-7#ixzz1TN9zfnG2








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    Jul 28, 2011 12:50 PM GMT
    socalfitness said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.

    The issue with the far left of the left is not really about economics. They are more interested in everyone being the same, even if it is shared misery. They don't want everyone to be better off if the result is inequality. That article reeks of class envy and class warfare covered up as so-called social justice. As the far left sees their influence crumbling, there will be more like articles appearing, and their tone will be bitter, shrill, angry, and unhinged, just like an increasing number of RJ posts (often started by a few who shout their thread titles in all caps).


    Sorry to burst your bubble, but the author is a well-known capitalist, former Wall Streeter, and hardly a leftist:

    "Henry Blodget is CEO and Editor-In Chief of Business Insider.

    A former top-ranked Wall Street analyst, Henry is also the host of Yahoo TechTicker, a Yahoo Finance video show viewed by several million people a month. He is often a guest on Bloomberg, CNN, MSNBC, NPR, and other networks. He has recently contributed to The Atlantic, Slate, Newsweek International, The New York Times, Fortune, New York, the Financial Times, and other publications. He is the author of The Wall Street Self-Defense Manual: A Consumer's Guide to Investing.

    From 1994-2001, Henry worked on Wall Street at Prudential Securities, Oppenheimer & Co., and Merrill Lynch. He ran Merrill's global Internet research practice and was ranked the No. 1 Internet and eCommerce analyst on Wall Street by Institutional Investor and Greenwich Associates."
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    Jul 28, 2011 1:18 PM GMT
    Christian73 said
    socalfitness said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.

    The issue with the far left of the left is not really about economics. They are more interested in everyone being the same, even if it is shared misery. They don't want everyone to be better off if the result is inequality. That article reeks of class envy and class warfare covered up as so-called social justice. As the far left sees their influence crumbling, there will be more like articles appearing, and their tone will be bitter, shrill, angry, and unhinged, just like an increasing number of RJ posts (often started by a few who shout their thread titles in all caps).


    Sorry to burst your bubble, but the author is a well-known capitalist, former Wall Streeter, and hardly a leftist:

    "Henry Blodget is CEO and Editor-In Chief of Business Insider.

    A former top-ranked Wall Street analyst, Henry is also the host of Yahoo TechTicker, a Yahoo Finance video show viewed by several million people a month. He is often a guest on Bloomberg, CNN, MSNBC, NPR, and other networks. He has recently contributed to The Atlantic, Slate, Newsweek International, The New York Times, Fortune, New York, the Financial Times, and other publications. He is the author of The Wall Street Self-Defense Manual: A Consumer's Guide to Investing.

    From 1994-2001, Henry worked on Wall Street at Prudential Securities, Oppenheimer & Co., and Merrill Lynch. He ran Merrill's global Internet research practice and was ranked the No. 1 Internet and eCommerce analyst on Wall Street by Institutional Investor and Greenwich Associates."


    The author was also a bit of a truther - http://www.businessinsider.com/birth-certificate-barack-obama-sarah-palin-son-trig-2011-4 and one of the people who believed Obama should release his long form birth certificate for the record. I think Blodget seeks to be opinionated. I think his one glaring omission was the reality that effective and statutory tax rates were radically different. The other thing that has been omitted was the fact that government spending was also much lower - so by all means, if you raise taxes to 1950s levels, taxpayers should demand spending come down to 1950s levels.
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    Jul 28, 2011 1:21 PM GMT
    Christian73 saidSorry to burst your bubble, but the author is a well-known capitalist, former Wall Streeter, and hardly a leftist: ...

    Not bursting my bubble at all. My comment did not pertain to the specific author, but to the themes of his article and the future articles and messages. His specific article could be interpreted as a warning to the wealthier to protect their assets as much as a call to arms to those who want to seize the wealth of others.
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    Jul 28, 2011 1:27 PM GMT
    I can only hope taxing the richest of the country is on it's way. As the middle class continues to evaporate from existence, we are steam-rolling into the "brazilification" of our country.
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    Jul 28, 2011 1:47 PM GMT
    socalfitness said
    Christian73 saidSorry to burst your bubble, but the author is a well-known capitalist, former Wall Streeter, and hardly a leftist: ...

    Not bursting my bubble at all. My comment did not pertain to the specific author, but to the themes of his article and the future articles and messages. His specific article could be interpreted as a warning to the wealthier to protect their assets as much as a call to arms to those who want to seize the wealth of others.


    Actually, it is a wake up call to millionaires and billionaires that they will actually have to start paying their fair share of taxes (instead of raking in the $$ on the backs of the middle class and poor). The wealthy call it "class envy" to protect their psyche from the social injustices they thrive on. The rest of American, however, knows the truth!
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    Jul 28, 2011 1:52 PM GMT
    catfish5 said
    socalfitness said
    Christian73 saidSorry to burst your bubble, but the author is a well-known capitalist, former Wall Streeter, and hardly a leftist: ...

    Not bursting my bubble at all. My comment did not pertain to the specific author, but to the themes of his article and the future articles and messages. His specific article could be interpreted as a warning to the wealthier to protect their assets as much as a call to arms to those who want to seize the wealth of others.


    Actually, it is a wake up call to millionaires and billionaires that they will actually have to start paying their fair share of taxes (instead of raking in the $$ on the backs of the middle class and poor). The wealthy call it "class envy" to protect their psyche from the social injustices they thrive on. The rest of American, however, knows the truth!


    How do you define fair share? According to IRS data, the wealthiest already pay a significant and disproportionate amount of taxes.

    http://www.american.com/archive/2007/november-december-magazine-contents/guess-who-really-pays-the-taxes

    "The latest data show that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare."

    Curious - do you contribute more in taxes than you are required?
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    Jul 28, 2011 2:05 PM GMT
    riddler78 said... How do you define fair share? According to IRS data, the wealthiest already pay a significant and disproportionate amount of taxes. ...

    They can make up a number - e.g. 70%, even 90% as an income tax rate, and extremely significant inheritance taxes to prevent one generation from passing wealth to the next. All under the guise of "fairness". But their definition of "fairness" is quite arbitrary. Instead of seeking to improve the middle class and the poor, they focus their effort on socialistic income and wealth redistribution, even though everyone is worse off, except the poor who are already in dire straights. While some who believe this way are successful, many have given up on the American Dream and focused their thoughts on how they are victimized.
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    Jul 28, 2011 2:35 PM GMT
    socalfitness said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.

    The issue with the far left of the left is not really about economics. They are more interested in everyone being the same, even if it is shared misery.


    No.

    We have discussed this before and you gave me every impression that you were an honest man who misunderstood something before; now understood. But now you have reverted to the old lie. The Left seeks everyone having the same opportunities , not the same things.

    Retract that, or we I can only conclude you are deliberately lying or you are genuinely stupid, and you are worthy of the same regard as SouthBeach.


  • HndsmKansan

    Posts: 16311

    Jul 28, 2011 3:30 PM GMT
    brendanmuscles said

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.


    I would absolutely disagree with this premise.
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    Jul 28, 2011 3:40 PM GMT
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.


    Nice to see some reasonable input amongst a morass of caustic uproar.
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    Jul 28, 2011 3:42 PM GMT
    mocktwinkie said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.


    Nice to see some reasonable input amongst a morass of caustic uproar.


    Except said reasonable input is in direct contradiction the actual effects of tax policy on the economy (i.e. when tax rates on the rich and corporations are higher, the economy expands and everyone gets richer).
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    Jul 28, 2011 3:50 PM GMT
    Christian73 said
    mocktwinkie said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.


    Nice to see some reasonable input amongst a morass of caustic uproar.


    Except said reasonable input is in direct contradiction the actual effects of tax policy on the economy (i.e. when tax rates on the rich and corporations are higher, the economy expands and everyone gets richer).


    So you actually believe that if, tomorrow, taxes were to be drastically raised on large corporations and the rich that the economy would all of a sudden get better? It would improve? There would be MORE confidence?
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    Jul 28, 2011 3:56 PM GMT
    Upper_Canadian said
    socalfitness said
    brendanmuscles saidIncreasing taxes too much on the richest really only results in the government shooting itself in the foot. I studied enough economics and finance to know this, and it is not rocket science. If you tax income at a very high rate, those people will have no motivation at all to work more- because the government is taking it all away. And as a result, this means they won't be spending it, which helps the economy. Double blow.

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.

    The issue with the far left of the left is not really about economics. They are more interested in everyone being the same, even if it is shared misery.


    No.

    We have discussed this before and you gave me every impression that you were an honest man who misunderstood something before; now understood. But now you have reverted to the old lie. The Left seeks everyone having the same opportunities , not the same things.

    Retract that, or we I can only conclude you are deliberately lying or you are genuinely stupid, and you are worthy of the same regard as SouthBeach.

    Nope - neither lying nor stupid. Perhaps you don't understand the pulse of this country as well as you assume, being a foreigner. There are some who believe the opportunities to be unequal, and for many they are. But many liberals ultimately want the results shared, always making excuses when opportunities are squandered and the latest social policies fail. Many will acknowledge belief in the expression, "from each according to his ability, to each according to his need", as long as they don't know the roots of the phrase.
  • rnch

    Posts: 11524

    Jul 28, 2011 3:57 PM GMT
    [quote][cite]mocktwinkie said...So you actually believe that if, tomorrow, taxes were to be drastically raised on large corporations and the rich that the economy would all of a sudden get better? It would improve? There would be MORE confidence?[/quote]

    yes!!!

    it's worked well several times in America's past.....rasing taxes on the rich is "Proven Past Performance"!

    it will work again in the present.....and in the future.

    the money has to come from somewhere...from someone....the middle class of America has been taxed to death.

    it's High Time for the wealthy to ante up!


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    Jul 28, 2011 4:12 PM GMT
    Christian73 saidSo enjoy today's low rates while they last.

    Read more: http://www.businessinsider.com/tax-increases-are-coming-2011-7#ixzz1TN9zfnG2

    Your history is correct -- your conclusions are wrong. This in not the 1920s or 30s.

    The US Supreme Court has allowed unlimited corporate donations to elections. That did not exist in the time period you're referencing. Nor did mass media exist as we have it today.

    US voters are now "sheepels" who will vote as the media tell them. Those who control the dollars control the votes. Quite different from the 1930s. Voters back then saw breadlines, guys on corners selling pencils in cups, and Hooverville shanty towns. Nowadays they see FOX news blaming it all on Obama & Democrats, courtesy of the criminal Rupert Murdoch.

    So your model is incorrect. Corporations and the wealthy have seized control of the US. We are now an oligarchy, no longer a democracy (Texas has already banned that term from their classrooms).

    You realize you are behind the times, yes?
  • CuriousJockAZ

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    Jul 28, 2011 6:16 PM GMT
    HndsmKansan said
    brendanmuscles said

    A better solution is to increase taxes on long term capital gains for the moment, say an extra 10-15%.


    I would absolutely disagree with this premise.



    Are you going to just disagree, or are you going to give us a reason why?