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  1. #1

    The Rich Are Really Getting Richer

    One out of every 34 Americans who earned wages in 2008 earned absolutely nothing -- not one cent -- in 2009.

    The stunning figure was released earlier this month by the Social Security Administration, but apparently went unreported until it appeared today on Tax.com in a column by Pulitzer Prize-winning tax reporter David Cay Johnston.

    It's not just every 34th earner whose financial situation has been upended by the financial crisis. Average wages, median wages, and total wages have all declined -- except at the very top, where they leaped dramatically, increasing five-fold.

    Johnston writes that while the number of Americans earning more than $50 million fell from 131 in 2008 to 74 in 2009, those that remained at the top increased their income from an average of $91.2 million in 2008 to almost $519 million.

    The wealth is astounding, says Johnston. "That's nearly $10 million in weekly pay!... These 74 people made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers."


    Johston sees the depressing figures as a result of government tax policies maintained by politicians with an eye on re-election, not good government:

    It is the latest, and in this case quite dramatic, evidence that our economic policies in Washington are undermining the nation as a whole.We have created a tax system that changes continually as politicians manipulate it to extract campaign donations. We have enabled ''free trade'' that is nothing of the sort, but rather tax-subsidized mechanisms that encourage American manufacturers to close their domestic factories, fire workers, and then use cheap labor in China for products they send right back to the United States. This has created enormous downward pressure on wages, and not just for factory workers.

    Combined with government policies that have reduced the share of private-sector workers in unions by more than two-thirds -- while our competitors in Canada, Europe, and Japan continue to have highly unionized workforces -- the net effect has been disastrous for the vast majority of American workers. And of course, less money earned from labor translates into less money to finance the United States of America.
    (...)
    In September, Senate Republicans along with a handful of Democrats, partnered to defeat the Creating American Jobs and Ending Offshoring Act, a bill that would have raised taxes on companies that send jobs abroad and benefited companies that bring jobs back to American soil.

    The notion that it's good business for American corporations to send jobs overseas has been championed by U.S. Chamber of Commerce, the nation's biggest and most powerful business lobby.

    http://www.huffingtonpost.com/2010/1..._n_773392.html
    "Even if you dance for your enemy on the rock, he will accuse you of splashing water on him." ~ African Proverb




  2. #2

    Re: The Rich Are Really Getting Richer

    Grouped By Vote Position
    YEAs ---53


    Akaka (D-HI)
    Bayh (D-IN)
    Begich (D-AK)
    Bennet (D-CO)
    Bingaman (D-NM)
    Boxer (D-CA)
    Brown (D-OH)
    Burris (D-IL)
    Cantwell (D-WA)
    Cardin (D-MD)
    Carper (D-DE)
    Casey (D-PA)
    Conrad (D-ND)
    Dodd (D-CT)
    Dorgan (D-ND)
    Durbin (D-IL)
    Feingold (D-WI)
    Feinstein (D-CA)
    Franken (D-MN)
    Gillibrand (D-NY)
    Goodwin (D-WV)
    Hagan (D-NC)
    Harkin (D-IA)
    Inouye (D-HI)
    Johnson (D-SD)
    Kaufman (D-DE)
    Kerry (D-MA)
    Klobuchar (D-MN)
    Kohl (D-WI)
    Landrieu (D-LA)
    Lautenberg (D-NJ)
    Leahy (D-VT)
    Levin (D-MI)
    McCaskill (D-MO)
    Menendez (D-NJ)
    Merkley (D-OR)
    Mikulski (D-MD)
    Murray (D-WA)
    Nelson (D-FL)
    Pryor (D-AR)
    Reed (D-RI)
    Reid (D-NV)
    Rockefeller (D-WV)
    Sanders (I-VT)
    Schumer (D-NY)
    Shaheen (D-NH)
    Specter (D-PA)
    Stabenow (D-MI)
    Udall (D-CO)
    Udall (D-NM)
    Webb (D-VA)
    Whitehouse (D-RI)
    Wyden (D-OR)

    NAYs ---45

    Alexander (R-TN)
    Barrasso (R-WY)
    Baucus (D-MT)
    Bennett (R-UT)
    Bond (R-MO)
    Brown (R-MA)
    Brownback (R-KS)
    Bunning (R-KY)
    Burr (R-NC)
    Chambliss (R-GA)
    Coburn (R-OK)
    Cochran (R-MS)
    Collins (R-ME)
    Corker (R-TN)
    Cornyn (R-TX)
    Crapo (R-ID)
    DeMint (R-SC)
    Ensign (R-NV)
    Enzi (R-WY)
    Graham (R-SC)
    Grassley (R-IA)
    Gregg (R-NH)
    Hatch (R-UT)
    Hutchison (R-TX)
    Inhofe (R-OK)
    Isakson (R-GA)
    Johanns (R-NE)
    Kyl (R-AZ)
    LeMieux (R-FL)
    Lieberman (ID-CT)
    Lugar (R-IN)
    McCain (R-AZ)
    McConnell (R-KY)
    Nelson (D-NE)
    Risch (R-ID)
    Roberts (R-KS)
    Sessions (R-AL)
    Shelby (R-AL)
    Snowe (R-ME)
    Tester (D-MT)
    Thune (R-SD)
    Vitter (R-LA)
    Voinovich (R-OH)
    Warner (D-VA)
    Wicker (R-MS)

    Not Voting - 2

    Lincoln (D-AR)
    Murkowski (R-AK)

    http://www.senate.gov/legislative/LI...ote=00242#name
    "Even if you dance for your enemy on the rock, he will accuse you of splashing water on him." ~ African Proverb




  3. #3

    Re: The Rich Are Really Getting Richer

    I have been currently reading on the subject. Two books I recommend: BAD SAMARITANS, and HOW RICH COUNTRIES GOT RICH AND WHY POOR COUNTRIES STAY POOR.
    Thomas Jefferson wanted to place a Salary Cap in the constitution. At the time, with most wealth coming from manufacturing, he figured that if there were a salary/earnings cap, once you would reach that sum, you would stop producing, since all extra earnings would be taken by the GOVUS as tax. Therefore, you would open space for somebody else.
    Jefferson's cap would have been set at US$200,000.
    I think it is not too late to get that idea rolling again.

  4. #4
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    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by ponchi101 View Post
    I have been currently reading on the subject. Two books I recommend: BAD SAMARITANS, and HOW RICH COUNTRIES GOT RICH AND WHY POOR COUNTRIES STAY POOR.
    Thomas Jefferson wanted to place a Salary Cap in the constitution. At the time, with most wealth coming from manufacturing, he figured that if there were a salary/earnings cap, once you would reach that sum, you would stop producing, since all extra earnings would be taken by the GOVUS as tax. Therefore, you would open space for somebody else.
    Jefferson's cap would have been set at US$200,000.
    I think it is not too late to get that idea rolling again.
    It's funny you would mention this. I was thinking just the other day, "What would happen if the United States established limits on how much people can make?" The single biggest barrier to our economic recovery is corporate greed. Sure, people love to blame the president. It's the going thing. But since corporations are beholden to the financial bottom line, profits are more important than reinvestment and creating jobs. Padding bank accounts of the wealthiest supercedes job creation, making the very foundation of capitalism a joke. A great theory, no doubt. But greed has turned capitalism, as a model, into a joke.

    And I realize just how socialistic this all sounds. Fine. Maybe we should give socialism a whirl since capitalism, as currently applied in the great United States of America, is a profound economic--and moral--failure.

  5. #5

    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by dryrunguy View Post
    It's funny you would mention this. I was thinking just the other day, "What would happen if the United States established limits on how much people can make?" The single biggest barrier to our economic recovery is corporate greed. Sure, people love to blame the president. It's the going thing. But since corporations are beholden to the financial bottom line, profits are more important than reinvestment and creating jobs. Padding bank accounts of the wealthiest supercedes job creation, making the very foundation of capitalism a joke. A great theory, no doubt. But greed has turned capitalism, as a model, into a joke.
    Answer to this is really trivial - rich people would hide their income and keep low profile.
    Roger forever

  6. #6
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    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by suliso View Post
    Answer to this is really trivial - rich people would hide their income and keep low profile.
    Forgive me for not understanding. I think ponchi was talking about salaries. If you make a capped income of $200K/year, which is certainly a nice chunk of change, that would limit to some degree the amount of additional wealth one could accumulate in comparison to, say, an IMG executive who earns a handsome salary and then gets millions more in bonuses. Which is reported directly to the IRS. And the more wealth one has, one also has access to more shelters.

    Ponchi, please correct me if I'm wrong in assuming you were talking about salaries.

  7. #7

    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by dryrunguy View Post
    Forgive me for not understanding. I think ponchi was talking about salaries. If you make a capped income of $200K/year, which is certainly a nice chunk of change, that would limit to some degree the amount of additional wealth one could accumulate in comparison to, say, an IMG executive who earns a handsome salary and then gets millions more in bonuses. Which is reported directly to the IRS. And the more wealth one has, one also has access to more shelters.
    Was he? Maybe so, but Jeferson certainly was talking about the total income. And in any case 200k/year in Jeferson's dollars would be at least 20 million today (in circa 1905, long after the aforementioned gentlemen had died, a glass of coke cost just 5 cents).
    Roger forever

  8. #8
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    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by ponchi101 View Post
    Thomas Jefferson wanted to place a Salary Cap in the constitution. At the time, with most wealth coming from manufacturing, he figured that if there were a salary/earnings cap, once you would reach that sum, you would stop producing, since all extra earnings would be taken by the GOVUS as tax. Therefore, you would open space for somebody else.
    Jefferson's cap would have been set at US$200,000.
    I think it is not too late to get that idea rolling again.
    Quote Originally Posted by dryrunguy View Post
    It's funny you would mention this. I was thinking just the other day, "What would happen if the United States established limits on how much people can make?" The single biggest barrier to our economic recovery is corporate greed. Sure, people love to blame the president. It's the going thing. But since corporations are beholden to the financial bottom line, profits are more important than reinvestment and creating jobs. Padding bank accounts of the wealthiest supercedes job creation, making the very foundation of capitalism a joke. A great theory, no doubt. But greed has turned capitalism, as a model, into a joke.

    And I realize just how socialistic this all sounds. Fine. Maybe we should give socialism a whirl since capitalism, as currently applied in the great United States of America, is a profound economic--and moral--failure.
    Well, some countries have tried socialism to varying degrees, I invite you to take a look at their great economic record: may I suggest North Korea, Venezuela, Vietnam or Zimbabwe?

    Look, I don't want to be mean with this, but that kind if analysis is overly simplistic and easily falls into demagogy. "Corporate greed is bad": really? where would we be without corporate greed? Would we be able to type in computers that are getting better by the minute, would we have medicines to prolong life, would we be able to go to Europe to watch Slams? Most probably not... "Oh, yes, but they could invest more and create more jobs, they're obsessed with the bottom line": well, somebody needs to remunerate capital, which, as hard as it is to believe, is a scarce resource and needs to be allocated to where it produces most; I'm sure the folks of biotech and internet companies were all too happy to remunerate those "bad, greedy" venture capitalists that risked huge losses by investing in them; oh, they could do it for "humanity": ok, please go and find those people willing to risk everything for a risky idea without expecting financial compensation and see if they can finance all those start-ups... "Yes, but they could re-invest more", "they should earn less", "we should place salary caps": of course, look at all that money that we could make if we confiscated all those traders' salaries; well, that money won't be always there for the taking, money and people are mobile and your analysis takes place in an non-existent static world: or do you really think that the high earners will stay happily there to watch how their money is taken away? it's simple, they would be poached by other countries; companies would move their headquarters to Hong Kong or another friendly country and it is then that people will realize who has been funding Medicaid and Social Security all these years; just look at the states' finances, look at New York and see how their tax receipts fell when those "bad, mean" traders started losing their jobs, look at who pays the lion's share of taxes in this and every country... And the reinvesting thing? look at how companies that hoard cash and don't reinvest are punished by the stock markets, look at how Apple keeps spinning better and better products, or Pfizer, or Genzyme, or whatever company: isn't that reinvesting? No, but they're bad companies. And it's not like they're employing millions of people already.
    Capitalism, as flawed as it is, and as imperfectly as it has been applied in America (because, let me assure you, golden parachutes, bailouts and subsidized home ownership are not what we capitalists are for) is still the best that we have come up with, it (and not the government) is the hand that is actually feeding you. It makes some riches richer, yes, but the poor are not poor because the rich and rich: part of the beauty of it is that it is not a zero-sum game, far from it. It's just that the rich and corporations and capitalism make perfect scapegoats, until the day when they're no longer there.
    Last edited by manolo; 10-25-2010 at 11:21 PM.
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  9. #9

    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by manolo View Post
    It's just that the rich and corporations and capitalism make perfect scapegoats, until the day when they're no longer there.
    Yahtzee. Severly punishing some guy who made 500 Million dollars last is not going to help me at all. I think the idea is that putting the squeeze on the super rich would help with taxes, but I would be surprised if any benefit was actually passed on to me.

  10. #10

    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by suliso View Post
    Answer to this is really trivial - rich people would hide their income and keep low profile.
    Quote Originally Posted by dryrunguy View Post
    Forgive me for not understanding. I think ponchi was talking about salaries...

    Ponchi, please correct me if I'm wrong in assuming you were talking about salaries.
    I understand that cynicism is usually a very good tool when dealing with economics and politics, but in this case, I would like to expand on some of the comments posted after mine.
    I understand Suliso's reply. But isn't that the same problem we have nowadays with Tax statements? All developed countries have highly elaborate Tax systems, and even more elaborate TAX COLLECTION systems. So to say that the rich would easily hide their income and keep a low profile would not be so easy. What kind of low profile can Steve Jobs, Bill Gates, George Soros, Alex Rodriguez or a Hollywood star keep? If by low profile you mean they would not buy their 7th Ferrari, so be it.
    I think Jefferson was talking TOTAL income. Again, his idea was that once you would reach a certain level of income, all your extra income would be taxable. You would stop producing, but if society would still require more of whatever you made, that would open possibilities for other people. Jefferson's concerns were about EMPLOYMENT and wealth distribution. I find those concerns even more relevant today.

    If I may detour. There is a well known theory that states that certain conditions stop development and simply give such an advantage to established systems that new ones can not rise. One example (the one I remember from that theory) is the predominance of the QWERTY keyboard. This arrangement was designed in order to STOP typists from typing too fast (at the time, the typing machines would jam severely). All typewriters had that arrangement, but when better designs came up, people simply did not use them because they were used to QWERTY. The DVORAK arrangement is far better, but it has only grasped root in France (and it was simply because of the Gallic mentality that everything Anglo is evil, except Angelina Jolie). Coming back to my position here, one of the main problems for the young entrepreneur is that she has no financing, and therefore can not compete with somebody that does. It is a well known proposition: the hardest part is to make the first million. After that, it is down hill. If you had an Earnings Cap, the people that already made their cap would be, again, forced to leave the game for a while, and open space for others.

    Last, Manolo brings up the subject that Socialism is no better than capitalism. I agree that we can discuss the subject, but he uses three examples that I believe are not representative. He knows that I am Venezuelan, and my reply to that is that Venezuela is not a Socialist State; it is a Feudal State running on a communist, outdated style of theft. I would point out to the Scandinavian countries as better examples. I agree that Capitalism is a good system that fuels advancement, but we really have to look at something: Capitalism, as we know it, has been running only since the abolition of the Bretton Woods agreement, and in my opinion, it is becoming more and more like a Ponzi scheme. Lets remember one phrase from the 2008 financial meltdown: "Why is it that in Capitalism, the profits are privatized while the debts and costs are socialized?. i.e. spread around society". I believe that statement has not been answered.

    Heck, leaving the high-faluting, academic prose from above, I believe that anybody making over one million a year should be capped. One Million leaves you enough for One Ferrari a year, a moderate home, and some fine travel (and dining, clothing and the latest Federer endorsed racket). Everything else, goes to taxes, or you give to charity.
    And if, as Suliso says, you want to stash it in Lichtenstein, so be it. Let the IRS start looking on your records.
    Last edited by ponchi101; 10-26-2010 at 08:12 AM.

  11. #11

    Re: The Rich Are Really Getting Richer

    I'd just like to point out that this thread is a good example of how incredibly smart many of our members are. Go TAT.

  12. #12

    Re: The Rich Are Really Getting Richer

    Well, at least comparatively speaking, all I have to offer on this topic IS overly-simplistic. Perhaps because my, ahem, intellect () isn't at a level to plow through all the available literature on economics and political systems and all that. Perhaps because pretty quickly such theoretical debates just make me grind my teeth. (OH, OK, no, it's cause of .)

    While I do wish we all could find some way to live in a more purely Kumbayaesque socialist world- well, clearly, we're not capable of this. At some point, competitiveness and greed are going to take over, whether we like it or not. So, at least for now, captitalism is the best we can come up with out of an ugly mixed bag? So be it.

    Now, look, I belong on no high horse- ain't gonna stop MY Wimbledon dream vacations anytime soon. But, still, I'm more comfortable on the front lines. I guess I'm way more concerned with the poor folks, and not as concerned with how to keep corporate greed thriving, and the rich folks happy enough.

    Sorry, but I suspect that all of us here in TAT-land are indeed working and toiling almost exclusively for the betterment of the richer folks- check OUT the salaries of those above you, kids. And this is very much true in the social services, beleive me. Not much you're going to be able to do about this in your lifetime. With capitalism- and, ultimately, any system- you have to have your winners and losers.

    BUT- when ti presents us with an initial post about "one out of every 34 Americans who earned wages in 2008 earned absolutely nothing"- well, gee- that's a problem. When we live in a country with so many homeless and folks living in horrible conditions, and allows for the ongoing Katrina nightmare and where in my city far too recently hundreds of seniors and poor folks died because they couldn't afford air conditioners, etc., etc.- we have problems.

    Cap things at a million? Not gonna happen in a zillion years. Me stop whoring myself for the betterment of the poo-bahs and giving up my Wimbledon vacations? The same zillion years. But, if we can find some way where we can tax the f**k out of really, really rich folks so that we can at least metaphorically rip the $200,000 engagement ring off? (Or at least make certain bride-'n'-groom "blonde" combos blush on their Mega Wedding Days just a lil bit?) Well, I can live with that.
    Last edited by nelslus; 10-26-2010 at 09:26 AM.
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  13. #13

    Re: The Rich Are Really Getting Richer

    A quick comment about the people declaring zero income: I help clients try to refinance their vehicles in order to save money. That includes gathering their income info. I've run across several cases where a woman operates a very small business out of her home that makes nothing, and her husband's income supports them both.

    A personal example: my brother is also self-employed but really doesn't work that hard. A few family members help him out a little, and he has a low cost of living, so whatever. It's a little bit like he's still in college. The last few years he's declared something like 8K in income.

    There are certainly improvements to be made to the economy. I just wanted to point out that a number of the people with no income are stay-at-home-moms with a hobby, and a number of people with low low incomes are honestly lazy.

    Both of those things sound more fun to me than slaving for an MBA, working 60 hour weeks, kissing a lot of ass, and clawing my way to the top of a company so I can FINALLY lounge around in the corporate jet with a huge paycheck, a serious blood pressure problem, and few fulfilling personal relationships. CEOs don't make me feel envious.

  14. #14
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    Re: The Rich Are Really Getting Richer

    Manolo, I'm not really arguing that we should throw the baby out with the bathwater. What I'd like to see is more balance. When corporate greed harbors the potential to be a significant contributor to the near collapse of the U.S. and global economies, as we witnessed a few years ago, I'm okay with some checks and balances. While I would prefer that those checks and balances came from within, that business had a higher purpose than profit, we all know that isn't going to happen. I happen to work for a company dedicated both to profit and to improving quality of life for those around us. It's an honor and a privilege to be part of it. And I realize that such a company would have a shelf life of about 5 seconds in just about any other industry.

    So I'm fine with living in my little fantasy world. As cynical as I often sound, I'm really an idealist. There's always a better way to look at our world and the challenges that perplex us. Far too often, we are reluctant and recalcitrant to take a critical look at other alternatives--or entirely new models.

    But I stand behind the assertion that capitalism, as it is often applied, is a moral failure.

  15. #15
    Tour Champion manolo's Avatar
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    Re: The Rich Are Really Getting Richer

    Quote Originally Posted by dryrunguy View Post
    Manolo, I'm not really arguing that we should throw the baby out with the bathwater. What I'd like to see is more balance. When corporate greed harbors the potential to be a significant contributor to the near collapse of the U.S. and global economies, as we witnessed a few years ago, I'm okay with some checks and balances. While I would prefer that those checks and balances came from within, that business had a higher purpose than profit, we all know that isn't going to happen. I happen to work for a company dedicated both to profit and to improving quality of life for those around us. It's an honor and a privilege to be part of it. And I realize that such a company would have a shelf life of about 5 seconds in just about any other industry.

    So I'm fine with living in my little fantasy world. As cynical as I often sound, I'm really an idealist. There's always a better way to look at our world and the challenges that perplex us. Far too often, we are reluctant and recalcitrant to take a critical look at other alternatives--or entirely new models.

    But I stand behind the assertion that capitalism, as it is often applied, is a moral failure.
    Good, we can just agree to disagree, then.

    But for the record, I'm also proud of working for the financial services industry and I really think that we're also improving the quality of life of people. While making profits.

    And I can also be an idealist, but in matters of economics, I'm as cynical as they come.
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