Market politics

[EVNow]

He says some of the right things but he's just too damn soft and didn't come off as having enough conviction in the debates with Cruz.

The fact that the DC consulting class and Obama alums chose him over Tracy Abrams, who did better under tougher conditions, is all we need to know about Beto.

BTW, considering that his wife is a Billionaire Heiress makes it difficult for him to be a real progressive. Infact he supported eviction of people so that his father-in-law could demolish apartments to build.

But the background is equally fascinating. Corporate Dems want to make sure Bernie doesn't get nominated. That would sink their donors and with that their income stream. So, they first floated Kamala, when that didn't seem to work out well, they are floating Beto. Its interesting they are not getting behind Biden - do they think he is too damaged and won't win ?

 

[EVNow]

On an AOC related point, can someone please explain to me the rational of taxing the rich.

They have the most money - and can easily afford to pay more. Also, they have benefitted most from government spending.

BTW, I think AOC's ideas were supported by Republican presidents like Ike. The marginal rate was 90%.

I like the idea of
90% tax over 99 percentile income.
99% tax over 99.9 percentile income.

Make all income brackets dependent on minimum wage & median income. See how quickly rich agree to increasing the minimum wage

This should help bring US back from being an oligarchy.

 

[neroden]

I can agree that higher marginal rates will change behavior in a positive direction. But I doubt it will generate the revenue that is needed to finance the proposed new spending.

Great!

As for the second question, that has already been explained.

We Can Pay For A Green New Deal | HuffPost

And then there's health care spending:

The US currently spends more per capita on health care than any other country in the world, and gets less for it than any developed country. Basically we replace the exorbitant premiums we are currently paying to health insurance companeis with somewhat lower taxes, and we have universal health care -- pretty easy really. (The cost savings are from removing insurance company paper-pushers, removing hospital paper-pushers, removing doctor's office paper-pushers, controlling prescription drug price gouging because a single payer can just say "No, you take what we offer you or you get nothing", controlling hospital price gouging the same way.)

I pay $5000 a year for garbage insurance which covers nothing, and it's the best available on the individual market where I live. For the same amount in taxes, I'm sure the state could provide a plan equivalent to Medicaid -- and I'd pay twice that for a plan as good as Medicaid.

There would be a lot of paper-pushers, employed to deny health care to people or push inappropriate health care on people or fight other paper-pushers, who would have to find productive jobs. I'm OK with that.

 

[neroden]

Everything I post about money and wealth only applies to earned value added accomplishment. Everything else is a boat anchor on the human condition.

So, if you look back historically, there are very close to zero major fortunes which your posts apply to. The vast, vast majority of fortunes were collected in other ways, for nearly all of history, from kings with armies to feudal landlords to slave plantation operators to bankers to modern landlords...

A few more recent examples:

* AT&T: got lucky because *someone* had to be the network-effect monopoly winner
* Standard Oil: took natural resources out of the public ground, dumped toxins in the public rivers to make money
* Microsoft: cloned C/PM, got a contract through crony family connections, then engaged in illegal monopolistic tactics to make money
* Facebook: got lucky because *someone* had to be the network-effect monopoly winner

So the rest of us are discussing world economics, politics, and history. You're discussing... a few engineers and scientists? That's kind of *irrelevant*, right?

 

[JRP3]

For those thinking Trump still has the same support that he did during the election:

“It’s killing us,” said the chairman of the company, Pat LeBlanc, 63, a Republican who voted for Mr. Trump. He now expects the president’s tariffs will chop his 2019 profits in half. “I just feel so betrayed. If we fail because the company is being harmed by the government, that just makes me sick.”

Trump Has Promised to Bring Jobs Back. His Tariffs Threaten to Send Them Away.

 

[neroden]

neroden,
I read your lengthly post as conflating money with corruption. We need to ban money in politics; full stop.

It's not doable. Look, if I'm a billionaire, I can quietly "indicate" that any politician who sides with me will get rewarded later, in some imperceptible manner, perhaps through support for his favorite charity. There is no way to prevent this. Can you think of one? Even if they don't do that, politicians will listen to the will of the people with money, because money is power.

I've suggested a "House of Billionaires" to replace the Senate, just to bring out into the open and reveal what's actually going on -- it would make them stop hiding in the shadows. The principle behind the original House of Lords in the UK and the House of Chiefs in Botswana was to take the traditional, undemocratic powerbases, force them into the system, and force them to show up IN PERSON, because often people like Charles Koch and Sheldon Adelson are less willing to push their agendas when they have to actually be in the legislative chamber themselves personally and argue, in person, with the people who disagree with them.

After a certain point, money is corruption. I'm not sure what that point is. The average price of a Congressman is apparently only a few tens of thousands of dollars.

 

[wdolson]

You haven't studied history, and I'm not about to believe your bullshit over dozens and dozens of professional economists & historians of the highest caliber.

In a very important sense the 70% tax rate on excess individual profits above $10 million per year -- and it really should be 92% like it was under Eisenhower -- is not about raising revenue. It's about incentivizing rich people to do something useful with their lives rather than keep mindlessly accumulating money at the expense of everyone else. It was coupled with giant deductions for research and development, capital investment, charitable activity, etc.

It was absolutely documented that instituting the New Deal tax rates redirected the money of the very wealthy into R&D, capital investment, etc.... whereas back in the 1920s they just bought massive yachts.

Right now they're just buying massive yachts. (And the equivalent.) Go back to 1950s tax policy, we'll go back to 1950s level of R&D and capital investment.

(Note that under 1950s tax policy Musk would probably never pay any taxes, due to his habit of reinvesting EVERYTHING in R&D and capital investment.)

A couple of years ago I thought that capital gains should be taxed as regular income, but to encourage real investment in American business, investments that meet some criteria for truly being reinvestment in American businesses that are going to employ Americans, tax capital gains on those investments at the existing capital gains rate. Then you would see capital investment flooding into expanding American businesses.

I separate wealth earned by adding value and that which is not.

I'm not sure I can sign up for the $10M household paying five times more in tax then the $200K household not being good enough. They are paying five times as much and yet that is not enough for some. We need to extract more from them to reduce the deficit? I get that earning more money is a way of reducing your credit card balance but is not spending less also an option?

I'm obviously on "one side" of this discussion and readily admit so. That being said, the people that I worked with to get where I am did well as well. I was raised to make jobs, not take jobs (my dad's words still ring in my ears fifty years later ). We need to raise better citizens who do the right thing not because we tax them and redistribute their wealth but because they are good people and contribute back to the country that allows people to be successful.

Ayn Rand was using a base ball bat to beat people over their head with her point but it really is worth considering what end results from attacking the competent.

A number of people who know history have pointed out that when inequity between the richest and poorest has gotten to where it is now in the US one of two things happen: popular revolt against the rich like the French Revolution, or a crushing caste system and a stagnant or collapsing economy. Nick Hanaur who is a Seattle based entrepreneur is one of the people sounding the alarm. He points out he's making the point out of self interest. He doesn't want his head on a spike.

Great!

As for the second question, that has already been explained.

We Can Pay For A Green New Deal | HuffPost

And then there's health care spending:

The US currently spends more per capita on health care than any other country in the world, and gets less for it than any developed country. Basically we replace the exorbitant premiums we are currently paying to health insurance companeis with somewhat lower taxes, and we have universal health care -- pretty easy really. (The cost savings are from removing insurance company paper-pushers, removing hospital paper-pushers, removing doctor's office paper-pushers, controlling prescription drug price gouging because a single payer can just say "No, you take what we offer you or you get nothing", controlling hospital price gouging the same way.)

I pay $5000 a year for garbage insurance which covers nothing, and it's the best available on the individual market where I live. For the same amount in taxes, I'm sure the state could provide a plan equivalent to Medicaid -- and I'd pay twice that for a plan as good as Medicaid.

There would be a lot of paper-pushers, employed to deny health care to people or push inappropriate health care on people or fight other paper-pushers, who would have to find productive jobs. I'm OK with that.

I'm in the same boat with health insurance. My monthly premium is larger than my mortgage payment and I have the cheapest policy I could find. I'm fortunate I've never needed it, but I've paid my own way with health insurance since 1994.

I saw an article today about a recent poll showing that 52% of Republicans favor Medicare for all. Support is even higher among Democrats and Independents.

 

[BioSehnsucht]

Some, trivial, are in the Constitution. 1) Over 35; 2) Native born. Two Republicans are exceptions to #2: McCaine and Cruz. I know the arguments for exception, I'm just a strict constructionist on this point.

#2 only applies to Democrats, obviously.

 

[gilscales]

Charles Koch and Sheldon Adelson

So only the ultra rich on the right?

 

[anon]

In actual practice, the effect of the 1950s tax rates was that money was *kept in the corporations* and used for R&D rather than being used to buy yachts. Like I said.

Rich people these days get the money out of the corporations and buy the yachts. Documented.

While I share your disdain for rich people just spending money on things like yachts instead of productive investments, there is a problem with this: Musk took his money out of Paypal, then took some time before he reinvested it all in Tesla and SpaceX. How does a 92% tax rate allow for that? I don't see that it does - even if there are deductions for investments, that doesn't help you if you decide to keep the cash for a few years while working out what to invest it in. I suppose any such tax law would need to allow an investment deduction even for just placing the cash in a special-purpose trust/company/fund of some kind that would restrict future withdrawals for anything other than investments. I expect you are implying that such a thing would be allowed, but I think it needs to be brought up as a key part of the argument whenever mentioning such high tax rates.

I personally quite like Bill Gates' idea though - he doesn't agree on taxing income to a large extent, but instead thinks there should be a very large consumption tax. I think a hundreds of percent tax on things the private yachts would address the problem to a large extent, while still leaving such things available to the those who really are motivated by them; although a lot of wealthy people do indeed waste their time and money, that's not the only way to look at this. It seems to me that at least some meaningful fraction of new entrepreneurs and other successful people are motivated by the idea that they can aspire to eventually lead a super-luxury lifestyle. So, even if those who spend money on things like this might be viewed as a drain on society, the idea that such things are achievable is not - in many cases, it probably motivates people to take some risks and ultimately be more economically productive, even if they ultimately don't reach that level of financial success.

I do very strongly agree with finding a way to ban big money in politics though!

Finally, I don't think that the lessons of the 1950s are necessarily directly applicable today, given the rise of so many high-tech startups reaching very high valuations so quickly and creating a lot of new wealthy people as a result.

 

[shlokavica22]

You assume the rich became so by being competent. That is not necessarily the case. Current POTUS a prime example.

Could you please expand on that claim? Many of us, incompetent morons, will love to know what is the recipe to become a billionaire.

 

[dhrivnak]

Could you please expand on that claim? Many of us, incompetent morons, will love to know what is the recipe to become a billionaire.

We could start by inheriting $200 billion in our early 20’s.

 

[bhtooefr]

It's not doable. Look, if I'm a billionaire, I can quietly "indicate" that any politician who sides with me will get rewarded later, in some imperceptible manner, perhaps through support for his favorite charity. There is no way to prevent this. Can you think of one? Even if they don't do that, politicians will listen to the will of the people with money, because money is power.

There are ways to get money out of politics without getting money out of people, but they require both repeal of the First Amendment including anything even in the spirit of it (while I think the First Amendment is badly written, a properly-written First Amendment would not allow this either), and an extremely powerful surveillance state (...although we have one of those) to implement.

And, even if you do that, if you have the kinds of wealth inequality that the US has, there's still ways for the hyper-rich to fight back, sometimes literally.

I personally quite like Bill Gates' idea though - he doesn't agree on taxing income to a large extent, but instead thinks there should be a very large consumption tax. I think a hundreds of percent tax on things the private yachts would address the problem to a large extent, while still leaving such things available to the those who really are motivated by them; although a lot of wealthy people do indeed waste their time and money, that's not the only way to look at this.

Consumption taxes, though, don't address any problems with the lack of mobility of money in an economy - in fact they do the opposite, encouraging hoarding money, or offshoring it to escape the consumption tax.

 

[JRP3]

Could you please expand on that claim? Many of us, incompetent morons, will love to know what is the recipe to become a billionaire.

Yes it's simple, have a rich father who bails out your failures and gives you money as a tax dodge. Not sure why you don't know this as it's common knowledge.

 

[JRP3]

I think a hundreds of percent tax on things the private yachts would address the problem to a large extent, while still leaving such things available to the those who really are motivated by them

I'm not sure, high dollar luxury items are one of the few ways the rich put some of their money back into the economy. Something like that was tried on yacht purchases and it hurt the US marine industry.

 

[shlokavica22]

Yes it's simple, have a rich father who bails out your failures and gives you money as a tax dodge. Not sure why you don't know this as it's common knowledge.

His father wasn't a billionaire. He is.

 

[JRP3]

His father wasn't a billionaire. He is.

I didn't say his father was, and I'm not sure Donald is, but the easiest way to be wealthy is to have rich parents.

 

[S'toon]

His father wasn't a billionaire. He is.

They said his father was rich, not a billionaire. And it's true, his father bailed out his failures and gave him money as a tax dodge. This is well known.

And we don't know that he's a billionaire. He says he is. He's said also that how much money he says he has is just a feeling.

 

[anon]

His father wasn't a billionaire. He is.

While I haven't checked the numbers for myself, I've read in multiple places that he would be worth more today if he had simply taken his inheritance and invested in the S&P500. If that's correct, then his father's wealth was pretty much equivalent to being a billionaire today.

 

[Intl Professor]

Could you please expand on that claim? Many of us, incompetent morons, will love to know what is the recipe to become a billionaire.

As a first guess, have multimillionaire parents. True in an astounding number of cases. Not Musk's I presume.