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Can Vegetarians Still Eat the Rich?
March 6, 2009 10:42 AM   Subscribe

Newsweek discusses Obama's "War on the Rich," a timely story, considering Bloomberg's recent christening of the "Obama Bear Market." And on a tangential note, TPM points out that those bankruptcy law reforms enacted under the Bush administration specifically included new provisions aggressively lobbied for by the "International Swaps and Derivatives Association," which were designed to protect the derivatives and swap industries. Yet another example of good timing.

Meanwhile, something smells foul at Merrill Lynch.
posted by saulgoodman (58 comments total) 7 users marked this as a favorite

 
That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income!

Can she, or we, really be that stupid?


There is no doubt in my mind that if we apply the American work ethic and are willing to make the necessary sacrifices, we can be even stupider than this. Americans can do anything.
posted by 0xFCAF at 10:50 AM on March 6, 2009 [33 favorites]


More like defense against the rich (amirite)
posted by DU at 10:55 AM on March 6, 2009


That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income!

I read this story, and it's funny for the stoopid and the lulz it contains. But here's a real question that no one seems able/willing to answer. Is it more stimulative to let her (and people like her) keep the $2100 to do with as she pleases, or is it more stimulative for the government to take it?

The answer should include phrases like "marginal propensity to consume", "marginal propensity to save", and "marginal propensity to import", among others.

For example, is $2100 spent on a new flatscreen TV imported from Korea but sold through a US retailer as equally stimulative as having a $2100 new carpet manufactured in North Carolina installed in her home by (non-illegal immigrant) professionals? And is either of these as stimulative as the government repairing a slice of highway, or funding a research grant?

One may be more or less stimulative than others, but it is unlikely that they are all equal. I actually don't know. But this kind of data completely answers the question of whether her taxes should be raised. Unless the reason for raising her taxes is emotional, and political.
posted by Pastabagel at 11:01 AM on March 6, 2009 [7 favorites]


Disclosing the identities of Merrill Lynch & Co. employees who were paid $3.6 billion in bonuses just before the firm merged with Bank of America Corp. will cause “grave and irreparable harm,” said lawyers for the companies.

Ok, I want those lawyers for my defense if I ever murder someone.

"Your honor, disclosing the identity of the culprit will cause grave and irreparable harm to the defendant."
posted by darksasami at 11:03 AM on March 6, 2009 [12 favorites]


C'mon baby, eat the rich
Put the bite on that son of a bitch

posted by Hat Maui at 11:03 AM on March 6, 2009


If it's war on the rich then WTF is TALF?
posted by ornate insect at 11:04 AM on March 6, 2009


It's more stimulative to tax it because it can be invested in infrastructure that produces further wealth. Also, marginal propensity to consume, marginal propensity to save and marginal propensity to import.
posted by DU at 11:06 AM on March 6, 2009 [5 favorites]


Is it more stimulative to let her (and people like her) keep the $2100 to do with as she pleases, or is it more stimulative for the government to take it?

The highway between me and my dentist ceased to exist for the last year, and getting there (or anywhere else) was quite the nightmare. I can't say for that particular $2100 but based on how far I'm willing to walk to have someone use power tools on my head, how the local streets look come spring time, and how many houses are close to her office, she'd be out way more than $70,000 in pretty short order.
posted by Kid Charlemagne at 11:14 AM on March 6, 2009 [4 favorites]


That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income!

I thought this too, when I was seven. Then my father explained the way it actually works in about - oh, twenty seconds. So what I conclude is that we are largely a nation of ignorant children.
posted by Optimus Chyme at 11:17 AM on March 6, 2009 [6 favorites]


PB: I don't know if this answers the question or not, but let's say someone earning significantly over the $250,000 threshold (who, remember, would only get taxed more on their earnings in excess of that amount--and from the Depression through to the 60s, the comparable rate was 91%, when all that's being proposed now is a shift up from 32% to 36%) buys a pair of luxury shoes for, say, $5,000.00.

If the average price for a decent pair of ordinary shoes could be had for $50, that's 100 pairs of shoes for those of us who aren't in the habit of spending money extravagantly. Sure it's a smaller amount of money going around to each shoe maker, but it gets spread around more. That's why (among all the other reasons that Teddy Roosevelt described so eloquently here) letting the upper end of the income ladder get top heavy is harmful to the economy as a whole. Concentrated wealth leads to more concentrated wealth.

A little gem from Roosevelt's speech, linked above: The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man's making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have called into being.
posted by saulgoodman at 11:18 AM on March 6, 2009 [15 favorites]


Also, "Obama Bear Market"? What the fuck?

That's like blaming the doctor at the hospital for not waving a magic wand over you and fixing everything instantly while conveniently forgetting about the drunk rich kid who ran you over.
posted by Optimus Chyme at 11:20 AM on March 6, 2009 [78 favorites]


considering Bloomberg's recent christening of the "Obama Bear Market."

Ahem.
posted by Pastabagel at 11:21 AM on March 6, 2009 [1 favorite]


A little gem from Roosevelt's speech, linked above

If I had a dime for every time that Fox News has implied that both Roosevelts were Crypto-Socialist Dictators in the past six months .....
posted by blucevalo at 11:25 AM on March 6, 2009 [2 favorites]


Wow, PB. From that article you linked about "Bush's Bear Market":

In 1981, after Ronald Reagan's deficit-expansion plan was enacted, the Fed jacked up interest rates and unemployment hit its highest level since the 1930s. Only after Bob Dole persuaded Reagan to roll back a big chunk of the tax cuts in 1982 did the Fed relent and let the economy recover.
posted by saulgoodman at 11:26 AM on March 6, 2009 [1 favorite]


The answer should include phrases like "marginal propensity to consume", "marginal propensity to save", and "marginal propensity to import", among others.

I'm not going to answer if I can only use the words you want me to use.
posted by kingbenny at 11:29 AM on March 6, 2009


That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income!

I'm actually encouraging the WATBProductive Class to go John Galt. I'll set up a website where the Galters can sign up and tell everyone that they just aren't going to take it anymore. While they tell the world about the hardships imposed by letting the Bush tax cuts expire in two years, they can list their profession and clients. Why? Umm, no reason. I'll be over here...making a few calls. Calls totally unrelated to the client lists.
posted by ryoshu at 11:29 AM on March 6, 2009 [3 favorites]


saulgoodman-

That's a very good question, to which I do not have the answer. Yes, the 100 pairs of shoes money gets spread around, but sdo does the $5000. That may go to a sales commission and a designer, who in turn buy something else, and something else, etc. Included in that are laborers, craftsmen, and the like. It also gets spread around a lot, but not in ways that are obvious. That's why the "marginal propensity to import" is important. There's a good chance that the $5000 for the pair of shoes does to a NYC designer, but the $5000 for 100 $50 shoes goes to china. In that case, the $5000 is probably better. but if the designer is in Milan, maybe not. If the data suggest the wealthy would spend that only on services in particular, which are provided by US residents, there's a strong argument to keeping that money flowing there.

It is very complicated. We are dealing with precisely one shitload of money. Let's be rigorous about spending it, for a change.

also, yes, the top bracket was 91%. The substantially rich, the million dollar salaries, etc., didn't actually pay it, however. Enter family trusts and foundations. Once you are that wealthy, it becomes beneficial for tax reasons to no longer own the money as long as you still control the money.
posted by Pastabagel at 11:30 AM on March 6, 2009 [2 favorites]


To hear conservatives tell it, you'd think mobs of shiftless welfare moms were marauding through the streets of Greenwich and Palm Springs, lynching bankers and hedge-fund managers, stringing up shopkeepers, and herding lawyers into internment camps.

This. Where can I enlist for this? Do you think they're recruiting?
posted by dersins at 11:32 AM on March 6, 2009 [24 favorites]


My understanding is that the rich person is much more likely to not spend that $2100 than would be the government or a middle- or lower-class person who receives some of it as a tax cut. Rich people can afford to save their disposable income when the economy sours; a median household can't.
posted by aaronetc at 11:32 AM on March 6, 2009 [3 favorites]


Thank you, saulgoodman. That is one of the great political speeches of all time; Teddy had corporations' numbers from the git-go.

I've been thinking about Teddy Roosevelt a lot, lately.
posted by Benny Andajetz at 11:37 AM on March 6, 2009 [3 favorites]


You know, I really think that the Republicans (or anyone who is decrying Obama's socialism, or making accusations about a war on the rich) hasn't woken up to realize that we're in a different world today than we were under Reagan. Yes, there was a time when the rich were idolized - but that was a time when it seemed likelier that we, too, could be rich, and when it was easier to think that the people who were rich in America had earned it. When you believe in a meritocracy, its easy to say "lets give perks to the top - they earned it, and when I'm up there with them..."

But I don't think we look at America as a meritocracy in the same way today. Now when I think of rich people, I think of:
-The greedy fuckers at Enron
-The thieves like Bernie Madoff
-The near-sighted loudmouth idiots on Wall Street
-Massively corrupt cronies, like George Bush and all his friends
-Shallow, callous and self-absorbed My Super 16 party girls (or whatever that show is)
-People with a great sense of entitlement but not a lick of human sympathy, like Rick Santelli
-People with far more ego than common sense, like the people who take huge chunks of bailout money and then go throw massive parties and pay big bonuses

I think that's another thing that George Bush soured the whole country on. Bush was a guy who failed at every business he ever ran, got into office, and appointed other failures to run our government, and said "Heckuva job!" when they failed at the government, too. Five years post Enron, things are still getting worse - which means people have had a long time for their rage to reall simmer and cook. They've seen the good ol' boys club, and they're tired of the Gentleman's C blowing the grade curve.

What started with Donald Trump - the rich person as blowhard - ultimately dead ended in Paris Hilton - the worthless dump-soda-on-the-poor-people-and-laugh blowhard. Its gone from "S&L asshole who doesn't do anything concrete, and who can't really explain what he does" to "person who definitively does nothing at all, yet is still super rich." I think our collective unconscious has had Paris Hilton as the face of America's upper class now for years, and at this point, you'd think that everyone would recognize that. But no, they just don't.

When John McCain was saying at the debates "But Obama's plans are going to spread the wealth around!" I was saying: yeah, fuckin' excellent! I don't think he understands that when the CEOs make hundreds of times what their base employees make, when that ratio has gotten way out of whack, all the people on the bottom rung of the pyramid - and there are a lot more people there than there are CEOs - say "yeah, spreading it around - that sounds like a good idea to me..." His attack was the exact reason why I liked Obama.

I mean, seriously, joes John "Married a Beer Heiress" McCain know how most Americans view golden parachutes? There was a Wall Street Journal story last year about how the CEO of Comcast had such a hellacious insurance policy that if he died while in office, the company would have to pay his widow a sum that was equal to the GDP of a small country - enough to bankrupt the company. When even the Wall Street Journal thinks CEO benefits are out of hand, the guy whose out of a job is probably beyond fuming. That level of entitltement had literally gotten to the point of danger: if that one sixty year old CEO died, thousands of people would have been put out of work.

And whining about paying taxes on a $300,000 a year salary? Fuck you! My friend, who is self employed, just had to pay taxes on the $16,000 he made last year - when he hasn't worked in a month this year. Fuck your $300,000. It is such a better class of problems to pay taxes on a massive salary than it is to not have any salary at all. 8% of America is unemployed - how many make mid-six figures a year?

Until these people wake up and realize that we've seen the rich and that we think they suck, they won't realize that writing big news stories about how we're going to war on the rich makes people like me want to support Obama and his lets help out the middle class at the cost of screwing the rich budget even more. Because fuck the rich.

Ok, rant over.
posted by Kiablokirk at 11:37 AM on March 6, 2009 [115 favorites]


"while conveniently forgetting about the drunk rich kid who ran you over."

YOU LEAVE LAURA BUSH OUT OF THIS!
posted by orthogonality at 11:41 AM on March 6, 2009 [17 favorites]


Pastabagel, I think what you are describing is called "trickle down economics." We've been doing that for the last 25 years. How's that working out?
posted by ryoshu at 11:42 AM on March 6, 2009 [8 favorites]


The answer should include phrases like "marginal propensity to consume", "marginal propensity to save", and "marginal propensity to import", among others.

Okay, let's talk about the "others" in that sentence. I live in the Netherlands, and although I'm self-employed now, when I was a wage slave, my earnings touched the top tax bracket. At that time, I estimate that I, single male living alone, was maintaining two, perhaps even three, minimum wage families by being taxed the way I was.

Yet I had plenty money to do the things I want to do. Being (un)able to buy yet another flat screen TV, had I desired one, was not really a consideration in my life.

I could have gone for the "me, me, me!" mentality, not paid the top tax (for example by leaving the country), and leave those two families sleeping under the bridge as a result.

Somehow I think society as a whole was better much of with me not whining over the top tax rate. Even although the "top middle class", me, earned less that would have been possible.

But that's just me.
posted by DreamerFi at 11:42 AM on March 6, 2009 [4 favorites]


PB: My suspicion is that luxury essentially amounts to inefficiency--overpriced raw materials, overpriced production processes, and then, a high premium for brand prestige. The result is the development of pockets of inefficiency in the economy, and for the most part, the money that falls into these little micro market bubbles doesn't in fact ever come back out.

It cycles there endlessly, part of a self-sustaining, but highly inefficient economic ecosystem within the economy as a whole. Six figure outfits are sold by prestige retailers, whose clerks make much higher than retail industry standard wages, who then buy luxury goods themselves. Likewise, the luxury producers who make the high end garments pay their workers higher than industry standard wages, and they likewise turn around and buy more luxury goods. Meanwhile, that's money that has effectively fallen into a black hole where the rest of us are concerned.

Also, a lot of money at the top end gets sunk into rent-seeking activity, which also doesn't help foster vigorous economic development or broadening prosperity--it does the opposite, in fact, if Adam Smith had it right on that count.
posted by saulgoodman at 11:44 AM on March 6, 2009


Do we get to ignore the Geneva Conventions for this war, too? I hear they're a bit quaint.
posted by enn at 11:56 AM on March 6, 2009 [3 favorites]


I read this story, and it's funny for the stoopid and the lulz it contains. But here's a real question that no one seems able/willing to answer. Is it more stimulative to let her (and people like her) keep the $2100 to do with as she pleases, or is it more stimulative for the government to take it?

Taxation policy should be adjusted in times of emergency.

1) The government can spend all of our money faster than we can individually.

2) The government can spend my money on specific things it deems stimulative.

3) She has no rational motive to stimulate the economy as opposed to socking it away. See also, Moral Hazzard

Reaganomics really only works when the economy is humming along. In a recession, it has been pretty soundly debunked...
posted by butterstick at 12:08 PM on March 6, 2009


J-O-B equals misery. /brownwhornet
posted by unknowncommand at 12:14 PM on March 6, 2009 [1 favorite]


"Until these people wake up and realize that we've seen the rich and that we think they suck, they won't realize that writing big news stories about how we're going to war on the rich makes people like me want to support Obama and his lets help out the middle class at the cost of screwing the rich budget even more. Because fuck the rich."

No, I don't think that's a good sentiment. I would say it's better to think we're all in this together, rich and poor, and indeed some formerly rich are now poor. But we all need to take care of each other, is the operative idea, or we'll all suffer more, and those who have the least suffer the most, and it does affect all of us. If some people don't want to join in, tough cookies, because we're going to sink or swim together.
posted by krinklyfig at 12:14 PM on March 6, 2009 [4 favorites]


Those bankruptcy changes that ISDA wanted do make quite a lot of sense. It's slightly complicated but in summary:

- derivatives contracts are documented under "master agreements". Each bank has a master agreement with each other bank it trades with.

- the master agreement contains standard provisions for what's called "close-out netting" and also for collateralisation which are key for reducing the systemic risk if a bank goes bust.

- The way that collateral works is that at the end of each day a bank (Bank X) works out the value of each of its derivative contracts with a particular bank counterparty (Bank Y) and who would have to pay who if Bank Y went bust overnight. The result of that analysis is then aggregated over all the derivatives that the two banks have between them. All the amounts that Bank X would owe to Bank Y are subtracted from the amounts that Bank Y would owe to Bank X. This gives a net figure, the net "exposure" that Bank X has to Bank Y. ("Close-out netting" is the part that allows the individual contracts to be aggregated.)

- Bank X can then require Bank Y to transfer cash or securities to it with a value equal to that net exposure (See this AskMe question for details of how this works). If Bank Y does go bust overnight then Bank X is reasonably happy that the risk it is taking is more or less limited to the movement in the markets that next morning, before it can terminate its contracts with (the now defunct) Bank Y.

- However, this all hinges on the ability of Bank X to terminate its contracts with Bank Y. If it cannot do that then it is exposed to market movements until it can, and it cannot require Bank Y to give it more collateral to cover that exposure. What's more if Bank Y could cherry pick which contracts it wanted to terminate, it would choose all the ones where Bank X owed it money and keep the other ones going, in the hope that its positions got better (or simply to delay paying). This is a disaster for Bank X who must suddenly stump up loads of cash and at the same time can't realise any of its assets with Bank Y.

- So, the changes to the bankruptcy provisions explicitly stop a bankrupt entity from (a) stopping its derivative counterparties terminating their contracts, and (b) cherry-picking what contracts it wants to keep. The idea is reduce the systemic risk of one bank going bust and then requiring huge gross payouts from all its counterparties where the net exposure could be zero.
posted by patricio at 12:21 PM on March 6, 2009 [2 favorites]


No, I don't think that's a good sentiment. I would say it's better to think we're all in this together, rich and poor, and indeed some formerly rich are now poor. But we all need to take care of each other, is the operative idea, or we'll all suffer more, and those who have the least suffer the most, and it does affect all of us

lol that sounds like something a poor person would say

fuck u got mine bitch
posted by Optimus Chyme at 12:21 PM on March 6, 2009


(sorry that was so long)
posted by patricio at 12:21 PM on March 6, 2009


3) She has no rational motive to stimulate the economy as opposed to socking it away. See also, Moral Hazzard

That's not Moral Hazzard, that's the Paradox of Thrift! Let's keep our esoteric economics metaphors straight people!
posted by delmoi at 12:45 PM on March 6, 2009


3) She has no rational motive to stimulate the economy as opposed to socking it away. See also, Moral Hazzard

That's not Moral Hazzard, that's the Paradox of Thrift! Let's keep our esoteric economics metaphors straight people!


And let's keep those crazy southern boys out of this.
posted by kingbenny at 12:55 PM on March 6, 2009 [7 favorites]


My take on that whole thing you're talking about there, delmoi and co., is that, to someone making $300G a year, a change in income of $2100 is not a huge deal, one way or the other. Not going to affect purchasing habits, etc.

However, to someone making $50,000 a year, esp. if that someone has kids, a little more money in your pocket is more likely to be stimulative – because that person is going to go out and finally buy that new pair of shoes, or hire the plumber to come fix the pipes, or take a well-deserved weekend trip, or some other thing that they've been putting off because of stagnant or decreasing income.
posted by Mister_A at 12:59 PM on March 6, 2009 [2 favorites]


Moral Hazzard and the Paradox of Thrift

Worst. Indiana Jones knockoff. Ever.
posted by designbot at 1:12 PM on March 6, 2009 [23 favorites]


If I had time I would knock out an elegant, thoughtfully worded post about the inequities of...

but I don't. So, fuck the rich.

*looks at clock*
posted by -t at 1:16 PM on March 6, 2009


+1 to kingbenny for that one. I was just about to make a joke about that myself.
posted by JHarris at 1:32 PM on March 6, 2009 [1 favorite]


Moral Hazzard and the Paradox of Thrift

Worst. Indiana Jones knockoff. Ever.



But a fairly decent band name!
posted by darkstar at 1:47 PM on March 6, 2009 [1 favorite]


"Obama Bear Market."
Hah. I've heard of the post hoc ergo propter hoc fallacy before, but pre hoc ergo propter hoc is taking it too far.

(fwiw, anti-bailout, but saying the bailout or Obama's policies caused the downturn is like saying the do-nothing herbal remedy you take to get rid of your cancer caused your cancer.)
posted by blenderfish at 2:28 PM on March 6, 2009 [5 favorites]


I like that you can become rich. That said, the disparity between the rich and the poor is far too great now. If you're successful, create a useful life-changing product or something, and you end up with a big house, four cars, and lifelong security, that's totally fine with me. To me, that *is* rich. But to far too many people now, they require much more before they consider themselves rich: a yacht, a thousand acres of land, a billion dollars, a private 747 that can taxi right to the front door of their resort home, etc. Must we, as a society, consider THAT much wealth the goal that we shoot for? I think we have gone so far toward benefiting the rich (at the expense of the poor and middle-class) that they are no longer just 'the rich', but have instead become the *obscenely* rich.

The first clue that things had gotten too out-of-whack came, for me, after Bush's big tax cuts for the wealthy. When Warren Buffet called those tax cuts 'welfare for the rich', that made me wonder why we were throwing ourselves $1.3 trillion deeper into debt just to give people already so wealthy more money than they even *wanted*. It's almost like we bent them over and forcibly turkey-baster'd wads of hundred dollars bills up their asses until they were bloated like fat ticks. Now it's time to pop those suckers...for the good of the country.
posted by jamstigator at 2:37 PM on March 6, 2009 [2 favorites]


So, fuck the rich.

I've known some really cool rich people who were very socially conscious. They didn't live ostentatious lifestyles, and they worked very, very hard at being fiscally responsible, to the point of being even more thrifty and less prone to impulse buying that the much poorer example that was me.

When I asked them about this, they pointed out that the way they got wealthy was by being smart with their money. They'd seen what it was like to be broke, and they were going to be careful to make sure that they didn't fritter what they had earned away.

So yeah, I'd make one small amendment to the above quote: "Fuck the born rich."
posted by quin at 2:41 PM on March 6, 2009 [1 favorite]


When the economy is humming along, the dentist puts that extra $2100 into: stocks, a first class upgrade, their kid's college tuition, or dealer maintenance for their expensive car [*]

When the economy is terrible, like it is now, they're not going to put it in stocks, because they're afraid of losing it, and if they put it in savings, the bank's aren't lending, so their $2100 is sitting there rather than stimulating the economy (that is, getting lent out and spent).

* generalizing here, I'm sure there are dentists making $250k who drive beaters ... somewhere.
posted by zippy at 2:50 PM on March 6, 2009


I would say it's better to think we're all in this together, rich and poor

If only the rich felt that way.
posted by Pope Guilty at 2:50 PM on March 6, 2009 [8 favorites]


Given how much money there is to be made in defense contracting (and in running Blackwater Xe), if Obama really does declare war on the rich, I'm pretty sure they'll win.
posted by l33tpolicywonk at 3:00 PM on March 6, 2009 [1 favorite]


That's why the "marginal propensity to import" is important. There's a good chance that the $5000 for the pair of shoes does to a NYC designer, but the $5000 for 100 $50 shoes goes to china. In that case, the $5000 is probably better. but if the designer is in Milan, maybe not. If the data suggest the wealthy would spend that only on services in particular, which are provided by US residents, there's a strong argument to keeping that money flowing there.

Well, if this is the way we're thinking...

Say the $5000 leaves the country as payment for the shoes, either the one fancy pair or the 100 regular pairs. Now the money is abroad. Oh no!

But the foreign company now has $5000. What do they do? Well, they are in Italy or China, so they can't actually go out and buy anything with these dollars, so they convert them into euros or yuan. But this isn't alchemy, it's an exchange. They trade their $5000 with their government for a set amount of euros or yuan, which is determined by the exchange rate (no surprise, because, again, this is an exchange).

But now the Italian or Chinese government has $5000. What can they do with it? Well, they can't buy goods in their country with it, because it is not accepted currency locally. So they can either buy something from America, or exchange their $5000 with someone who wants to buy something from America. Or they can save it, which means that the money will be used to make loans. But since it is American currency, these loans must be made to people who will spend it in America. So either way, the money comes back to America. It doesn't just disappear into thin air.
posted by notswedish at 3:45 PM on March 6, 2009


The strange thing to me is that I'll be in that bracket north of 250K and I couldn't be happier to see rates going back up to where they were. I had this discussion with a half-drunk, fully conservative neighbor the other night. He was beyond apopleptic in his Rayndian rage that he might part with an extra 3 or 4 percent of his income over 250K, all the while forgetting that here in OR, with our high State tax rate and his/my large mortgage deduction, Bush's tax cuts fucked us three ways from Sunday with the AMT. And I bet there's a ton more one or two income homes around in the 250-350K range that may actually pay less tax with the new rates if the AMT backs away. I'm not sure what money we're supposed to be using to try and ensure the food supply is safe and we have enough equipment to fight our wars. Just raise the fucking rates already and get to work.
posted by docpops at 4:12 PM on March 6, 2009


PS - my larger point is this: If you make 250K and think another 2K in taxes is a burden then you have got to be the worst money manager on the planet and deserve your fate.
posted by docpops at 4:15 PM on March 6, 2009


“if Obama really does declare war on the rich, I'm pretty sure they'll win”

No, they always lose. Have always lost in the past as well. Whether they had more men or better arms or whatever. The only way the wealthy have ever succeeded, historically, has been by treachery and betrayal (Villiens ye are and villiens ye shall remain).
And of course, infighting always topples an established elite ruling class.
But folks will always be more motivated to work for themselves than go and bust their ass to make some other guy a lot of money.
It takes a lot of effort to convince people otherwise. And eventually they wise up. Or some of them do. Evil in general (and greed specifically) is always its own undoing.
Buddy of mine and I went off to take care of some stuff, kind of dangerous (I learned a lot from him, one big thing being that only folks with limited outlooks see firearms as the only weapons, or indeed, weapons as the only weapons – in the right hands everything can be a weapon or a tool) guy asked us “aren’t you bringing weapons?” he said “No. It’s ok. They’ll have some.”
Combat power only matters in the immediate. Outside of a battle, all bets are off. You can threaten, sure. But in a strategic engagement, firefights are just one small bit of a very wide spectrum. I hear the same crap in anti-firearm rants about how the government has nukes and Warthogs and such as though they’re going to get away with strafing down Michigan Avenue and no one’s going to kick – no idea of guerrilla warfare much less revolutionary strategy.
Most of the work is done on the conceptual level. Weapon superiority is only a minor advantage (the Vietnamese come to mind). You have to convince someone to surrender in order to win. Typically fat dumb and happy folks give in pretty easy. Some people you kill them and the fight still remains.
(Ah, probably wasting my time)

In any event, it’s to rich folks advantage to have a stable government. Which is why its good not to get too rich. If you do have all the money and resources, suddenly – hey - you are the government and people are going to expect you to build roads, water reclamation plants, etc. etc. You say ‘no’ they’re going to take it from you. Mercs like drinking clean water too.
posted by Smedleyman at 4:15 PM on March 6, 2009 [4 favorites]


Has nobody noticed that one of the ways that the dentist plans to decrease her income is "by having her dental hygienist work fewer days"? I wonder how much that person is going to lose, esp as % of income, because the boss doesn't want to pay more taxes.
posted by epersonae at 5:15 PM on March 6, 2009 [3 favorites]


epersonae: A lot less than you think. Wages are a deductable business expense. Meaning, if taxes increase 10% ($30,000 hit hypothetically), and you decide to hypothetically cut 50% of her hours (to have a net hit of $30,000 of her salary), net income will rise (because you have less salary expense) and therefore the amount taxed will rise as well. So if you decide to do nothing, you will end up losing $30,000. If you decide to lay off the employee, it will be a loss of $30,000*(100% - tax_rate), clearly a lot less than you'd expect without taking into the consideration of the person's productivity.

By increasing taxes, it increases the impact of deductions and increases incentive to create more expenses. If she can work longer hours to have an assistant, it becomes technically more feasible, as their tax burden is reduced. If she, for example, needed one part-time assistant instead of one less, the equation is a lot more obvious:
To add another person, the cost would be: $salary * (100% - tax_rate)
Note how the bigger the tax rate is, the less the impact is, because tax income is reduced.
posted by amuseDetachment at 5:40 PM on March 6, 2009


Sorry correction in the FIRST paragraph:
If you decide to lay off the employee, they will save $30,000*(100% - tax_rate). E.g. if the tax rate is 38%, then it will increase their net income after taxes by $18,600.

If she is expecting $30,000 from paying less $30,000 salary to employees, she dead wrong.
posted by amuseDetachment at 5:46 PM on March 6, 2009


It's like this l33tpolicywonk:

Who is more likely to describe themselves as "rugged individualists"?
Who is more likely to describe themselves as "collectivists"?

Don't die alone and stupid. Fact is!
posted by Kid Charlemagne at 6:02 PM on March 6, 2009


If you're successful, create a useful life-changing product or something, and you end up with a big house, four cars, and lifelong security, that's totally fine with me.

Provided that you don't get the invention swindled away from you, or a company sees what you made and makes an inferior version but with their brand name behind it and destroys your market, or doesn't threaten to do that if you don't sell out to them. And, that you know how to market it successfully, and can convince people to invest in your invention, and don't get controlling interest taken away via lawsuit, and you aren't married to an opportunistic schemer who'll divorce you can take control of your work in that way (which happened to Gary Gygax)....

Mere invention is far from enough to become rich.
posted by JHarris at 6:13 PM on March 6, 2009 [4 favorites]


"No, they always lose. Have always lost in the past as well. "

Smed, God love ya, but the rich always lose? Lose what? The rich haven't lost their money or power. And if you take a look around the world, the vast majority of folks live in pretty squalid conditions precisely because the rich have won. The rich always lose feels good to say, but it just ain't facts as they is, man.
posted by klangklangston at 7:14 PM on March 6, 2009


Say the $5000 leaves the country as payment for the shoes, either the one fancy pair or the 100 regular pairs. Now the money is abroad. Oh no! But the foreign company now has $5000. What do they do? Well, they are in Italy or China, so they can't actually go out and buy anything with these dollars…

They purchase US Treasury Bills.
posted by five fresh fish at 11:18 PM on March 6, 2009


Related: Bank of America threatens to sue...a former employee who was willing to unconditionally tell the [N.Y.] state's attorney general which Merrill high-fliers received the thickest slices of a $3.6 billion bonus pie that was dished out on the eve of the January [w/Merrill Lynch]
posted by ornate insect at 11:37 PM on March 6, 2009


"God love ya, but the rich always lose? Lose what?"

History is pretty much a constant - albeit broken in some places - stream of the advancement of rights for the individual favoring the equitable rule of law against the arbitrary whims and wonton prejudices of the powerful (Yeah, I'm a big Teddy fan too).
I see what you're saying and within your terms, you're correct.
But look at it this way - right now we're discussing rights for homosexuals. Not making a lot of headway, but it's on the table. For one of the most maligned minorities in history.
Before that women. Before that blacks. Before that other ethnic minorities (the Irish and Italians and Catholics, etc. etc. took beatings too). Before that we stopped holding slaves as a matter of course. Before that we defied the rule of kings. Not just one king, all kings. Tho it was aimed at one.
And you have (skipping quite a bit) the Magna Carta, Charter of liberties, Concordat of Worms, etc. etc.
If you want to frame it in terms of a constant refinement in the technology of governance and distribution and control of resources that'll work too.
The Roman Empire was working towards that, but they fell, broadly speaking, because their worldview depended on an infinite space in which to expand. And they refused to stop following the drumbeat of conquest. Or just paying homage to the myth.
There's no question methods of coercion have been refined as well, but that too bends away from the baser desires of a man who rules others.
Take away the trappings, it's simply not possible for the wealthy to dominate the poor as they once did on as broad a spectrum. And slavery and such is ample proof of that.
I'll grant slavery still exists in the world, but it's not a lauded, open policy thing the way it was. Same could be said of antisemitism or any number of other methods one person can dominate many.
You might eat better and someone else might starve, but you can't go over and put chains on the starving guy and screw his wife on the weekends. Not much comfort when you don't have clean water to drink, certainly, but it's been getting better. And I expect it will continue to do so.
There's no reason anyone should be living in squalid conditions other than some people want to feel they're better than someone else. I'm with Fuller on that, it's just a matter of proper engineering. Once ego and base desires and excuses to give them free reign are eliminated from public affairs all that should clear up fairly quickly, if not one or two generations.
Communications have long been a barrier to organization. In fact, it's been the primary method of suppression in totalitarian governments, et.al. (those who control all the resources don't like people telling them they have no clothes). And communication is seeing major advances of late. Fairly simple prediction really.
...oh, I'm not saying it's not going to be bloody or there won't be a lot of suffering. But this is what people work for. Everyone wants their kids to have a bit more. They work for a better world. Only a few people resist that. And they rely on convenient fictions such as money. That, really, isn't where wealth is. We just all sort of play that game. When it stops becoming convenient, people stop playing it and invent something new.
Which is why we don't have feudalism anymore.
posted by Smedleyman at 12:33 AM on March 7, 2009 [2 favorites]


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