Rich pigopolists getting richer massively faster; troubling

[Durandal]

The problem right now isn't the rate of tax on the rich. It's that the rich don't pay taxes. By the time their accountants get through itemizing their deductions, they've made virtually no taxable income, so all their tax is returned to them. In the end, middle- and lower-class earners end up shouldering the tax burden.

That's why it's futile to raise taxes on the wealthy. They'll just find more accounting loopholes to get their money back. So instead, raise taxes on the middle-class, since they actually end up paying them. Honestly, I'm starting to see the wisdom of just abolishing the IRS and adopting a simple, no-deduction tax system. No capital gains tax, no write-offs, just a set tax on your earned assets. If you make money playing the stock market, that should be taxed the same as if you get a steady paycheck.

[Stark]

In older civilisations many different approaches to tax were taken as the state needed money and the rich found ways of avoiding the current system. I guess as Valdemar says, there's no political will behind finding a 'get even a tiny cut of the staggering wealth of the insanely rich' tax approach so it doesn't happen.

[Uraniun235]

I hope they have savings though. The number of people who follow Tyson's route and somehow become destitute after having hundreds of millions in the bank seems to be growing in the celebrity world.

Really? I hope they don't. I hope they all spend their way into destitution and destroy themselves. Don't you?

[The Duchess of Zeon]

What really bothers me is how the money is simply wasted. If I was a multibillionaire, the limits of my indulgences would be a private train and a three or four thousand tonne steam yacht capable of 37 or 38kts (Done in 1890s style with a clipper bow, faux-bowsprit, bronze gilt work forward, and a large overhanging fantail). Everything else could be profitably reinvested into the purchase of railroads, shipping companies, and large tracts of farmland. Wouldn't even need a mansion, and at least my indulgences would cumulatively employ several hundred people.

Why do rich people today waste so much money when the Robber Barons of the 1890s at least reinvested it into more industrial development? That is something that really, really bothers me in how the behaviour of the upper classes has progressively degenerated.

[Stark]

It's the pomp, like all aging aristocracies. They're all about image and splendour than investment or development, I think, like the whole 16th century French thing.

[Adrian Laguna]

Why do rich people today waste so much money when the Robber Barons of the 1890s at least reinvested it into more industrial development? That is something that really, really bothers me in how the behaviour of the upper classes has progressively degenerated.

I, for one, don´t understand the appeal of a private island off Dubai´s coast or in the Caribbean. If I had the money to buy something like that, I´d buy a steel mill instead. Having gigantic steel beams used to build skyscrapers with my name stamped on them certainly feeds my ego way more than some island few people will know about and fewer will see. There is way more pride to be had in saying, "See that building over there? That´s my steel supporting it," than bragging about where one spends the winter.

[Covenant]

These people are old money, so you need to remember they've never needed to work for it, they've always been rich and just assume that their lifestyle is the right of them any people like them, because they achieved it and other people have not. If these people's children didn't get a chance to inherit such wealth, such good business contacts, and so on, they'd fall to our level because they are no better than us. But because wealth is so useful for so many reasons, even when they try to work on their own merits to improve themselves, they're starting in a vastly different world already. The idea of reinvestment is probably as foreign to them as the idea of buying a 6,000 dollar shower curtain is to us.

[Patrick Degan]

What really bothers me is how the money is simply wasted. If I was a multibillionaire, the limits of my indulgences would be a private train and a three or four thousand tonne steam yacht capable of 37 or 38kts (Done in 1890s style with a clipper bow, faux-bowsprit, bronze gilt work forward, and a large overhanging fantail). Everything else could be profitably reinvested into the purchase of railroads, shipping companies, and large tracts of farmland. Wouldn't even need a mansion, and at least my indulgences would cumulatively employ several hundred people.

Why do rich people today waste so much money when the Robber Barons of the 1890s at least reinvested it into more industrial development? That is something that really, really bothers me in how the behaviour of the upper classes has progressively degenerated.

That's because generations of entrenched wealth and privilege have led to the classical pattern of a parasitical plutocracy capable only of soft living and, worse, soft thinking. They don't do more because they've never had to do anything to get to their present position in life or maintain it, so nothing of importance matters to them. Money is just money and as far as they're concerned, they have an infinite supply they're simply entitled to because, well, they are.

There's a lot to be said for the time when the wealthy got slammed with 65% tax rates and higher: they actually had to work to keep what wealth they could, and expand it as much as possible given the challenge. The result was an upper class who were capable and smart and understood the value of a dollar. That's why Howard Hughes was worth more than all these parasites combined (in terms of civilisational value). Hughes actually did things. Today's plutocrats by contrast face no challenges to their position or their wealth, so they blow it all on private islands or doing enough blow to chalk every football field in the NFL and Division I-A. They have no sense of value to anything so they don't do anything.

This is why entrenched wealth is a bad thing, for democracy, the state of the upper classes, and for civilisation as a whole.

[The Yosemite Bear]

or more to the point Paris Hilton makes me wish the Revolution followed by the reign of terror would just get started.

[Winston Blake]

Why do rich people today waste so much money when the Robber Barons of the 1890s at least reinvested it into more industrial development? That is something that really, really bothers me in how the behaviour of the upper classes has progressively degenerated.

Perhaps they need to be 'seen' by other ultra-rich people in order make connections. For example, being invited to parties where they can cozy up to politicians.

The more you earn, the more you can spend on frivolities, so someone can inflate their apparent status by wasting disproportionate sums on conspicuous consumption. The best way to become rich and powerful may be to appear that you're already rich and powerful. That is, already a part of the 'club' and deserving of the privileges of 'membership'.

[Stark]

Absolutely. Like any other aristocracy, they have to play the game and keep up with the cutting edge of outrageously wasteful pomp to maintain their standing. I think Mike has described this as the 'real' American dream.

It's like all family conquests, really: someone adds wealth to a family, and they might run it well. Their children, who might still remember the old days and remember the work invovled, might run it well too. The third generation remembers none of that: they've lived in extreme pampered luxury their whole lives. It takes a deliberate effort to keep grounded in such a wish-fulfillment situation where resources appear endless.

[Illuminatus Primus]

But it's not just ridiculously rich people: there are whole industries to support their huge ability to spend and provide products that are in some way worth hundreds or thousands of times what a regular example does. When people get so rich they don't even think about price unless it's over 50K, why not market absurdly expensive cutting boards and shower curtains? Better to sell one than to sell 10,000 regular ones for the same profit.

There are whole shows on E! Entertainment and MTV and VH1 dedicated to the worship of these disgusting classes. There's a whole - very popular - show that is dedicated to showcasing the obscenely rude and spoiled 16-year-old daughters of such people getting obscenely lavish and self-indulgent "sweet sixteen" birthday parties. Americans are aware of their existance and actually spend their time in awe/envy/vague imbecilic hope of becoming one of them, rather than righteous anger at the parasitosis of this class on the commonwealth.

[Illuminatus Primus]

I guess media knows no irony: the Kozlowski 60 Minutes clip on the Roman orgy was preceded by an advertisement for a luxury sports car, that you could not fast-forward.

[Fingolfin_Noldor]

There are whole shows on E! Entertainment and MTV and VH1 dedicated to the worship of these disgusting classes. There's a whole - very popular - show that is dedicated to showcasing the obscenely rude and spoiled 16-year-old daughters of such people getting obscenely lavish and self-indulgent "sweet sixteen" birthday parties. Americans are aware of their existance and actually spend their time in awe/envy/vague imbecilic hope of becoming one of them, rather than righteous anger at the parasitosis of this class on the commonwealth.

Actually, it's times like this that make me wonder if there's any real interest in this sort of nonsense, or the media has simply run out of ideas and proceed to show all manner of rubbish and so forth and just hopes in vain that people actually show some interest and they have some money out of advertising.

[The Yosemite Bear]

waiting for our descent into the Roman Empire mark II to officially come to a close...

I mean what's next circus maximus?

peodophiles in the highest offices?

senate appointing bush God?

[Admiral Valdemar]

Really? I hope they don't. I hope they all spend their way into destitution and destroy themselves. Don't you?

Facetious, dear. Facetious.

[Einhander Sn0m4n]

Really? I hope they don't. I hope they all spend their way into destitution and destroy themselves. Don't you?

Facetious, dear. Facetious.

I'm sure as hell not. We need a couple nice financial supernovas every now and then. Enron wasn't enough.

[brianeyci]

The problem right now isn't the rate of tax on the rich. It's that the rich don't pay taxes. By the time their accountants get through itemizing their deductions, they've made virtually no taxable income, so all their tax is returned to them. In the end, middle- and lower-class earners end up shouldering the tax burden.

That's why it's futile to raise taxes on the wealthy. They'll just find more accounting loopholes to get their money back. So instead, raise taxes on the middle-class, since they actually end up paying them. Honestly, I'm starting to see the wisdom of just abolishing the IRS and adopting a simple, no-deduction tax system. No capital gains tax, no write-offs, just a set tax on your earned assets. If you make money playing the stock market, that should be taxed the same as if you get a steady paycheck.

It's a problem with legislation itself. Raising taxes is done by the legislative branch, rather than any scientific or academic body. So, it always makes sense to appease the masses for short term re-election potential, rather than raise the taxes for long term stability. If there is 10% tax at under x money and at x + 1 dollar money there's 15 percent tax, it's a step function and people who make more money have absolutely every reason to try and eek out every puny deduction.

The IRS is underfunded and deliberately kept undermanned so taxes on the wealthy are not pursued. What is necessary is a complex system of equations, whose constants are determined by different economic indicators, and where you don't lose a staggering amount being just one dollar over or gain being just one dollar under. Based on this system of equations, someone plugs in their income, and the computations spit out an amount of tax you have to pay. If someone tries and whore their way around it, they'll quickly find nearly no gain. Because almost everybody uses banks, verifying income is a simple matter of requiring bank records and bank statements.

Deductions are a rather antiquated, flawed method of tax relief. Let's face it: the ones on the bottom are the least likely to have the intelligence or resources to slog through mounds of paperwork, while the rich can do it or can more importantly hire someone else to do it. That's why I support a broad base increase in the minimum wage gradually, rather than targeted programs for the extremely poor which require applications and mounds of paperwork, whose returns don't usually justify the work unless you're outsourcing to HR Block or something.

The most serious problem is that such measures will not be enacted universally across the world, so the rich will have capital flight to more tax friendly nations or jurisdictions. Flying another country's flag on your boat is one egregious example. So you still need to keep your base tax competitive, with a broad range of economic policies such as: highly educated and skilled workforce, cheap healthcare, higher quality of production and manufacturing. All the things which do not require manual labor as its base, so the shit holes of the world can't simply offer slave labor to the oligarchs and beat you.

[Zwinmar]

Actually, I think Claudius had it right <the roman emperor> he needed cash, the rich had it, he took it. But thats neither here nor there.

Get rid of tax breaks, deductions, loopholes. Make all those rich fuckers actually live like the lower class. Make them work at McDonalds for 3 years, thats all the cash they get to live on.

[Gerald Tarrant]

The problem right now isn't the rate of tax on the rich. It's that the rich don't pay taxes. By the time their accountants get through itemizing their deductions, they've made virtually no taxable income, so all their tax is returned to them. In the end, middle- and lower-class earners end up shouldering the tax burden.

That doesn't match the data I've seen.

This is from Greg Mankiw who in turn got it from the Wall Street Journal Link



For the record the IRS only had studies which went to 1996, this is the PDF I found, but their data shows the same trend as the WSJ graph. I suspect a little digging in the treasury site will verify the above.

Anyway here's the IRS study (PDF WARNING) LINK

The pertinent graphs are on pages 5 and 6.

The US government probably quit any serious income redistribution when the top marginal tax rate went from 70-50% in the 1981-82 FY (page 4).

[Darth Wong]

If the tax rates did not bother the rich, they would not have spent billions of dollars over the last 30 years in political campaigning, lobbying, and advertising to reduce them.

[Flagg]

I don't think that anyone making less than $30,000 a year should even have to pay federal taxes. I see nothing wrong with taxing billionaires upwards of 60%, either. Hell, I'd tax anyone who made over $200,000,000 a year at 75%.

[Adrian Laguna]

You know I think there is something to be said for money that is re-invested being untaxed. An industrialist who makes $200 million a year taxed at 75% would be left with $50 million, which is still a whole fucking lot. However what if said industrialist spends that 75% in expanding a railroad? Or building a factory? Or sponsoring the arts? Or doing something else that society will benefit from? Whether the government takes a big share of the person's income should depend on how said person intends to dispose of it. If they decide to keep the $200 million, then sure tax the hell out of it, but why tax funds that are being put to good use?

[The Duchess of Zeon]

I suppose one compromise would be to set the income tax rate extremely rate (60% or so) on the richest 1% of the country, and then allow them deductions when they invest the money productively, with productivity in this case being, entirely, a calculation about how many jobs the investment has created.

[Darksider]

I suppose one compromise would be to set the income tax rate extremely rate (60% or so) on the richest 1% of the country, and then allow them deductions when they invest the money productively, with productivity in this case being, entirely, a calculation about how many jobs the investment has created.

Exactly. Trickle down economics might actually have some merit to it if the the rich actually invested their money and created jobs