Source

"in the long run, “when pay setters set their own pay, there’s no limit,” unless “confiscatory tax rates” are imposed."

[Capitalism is broken? - NO!] "Piketty proposes instead that the rise in inequality reflects markets working precisely as they should: “This has nothing to do with a market imperfection: the more perfect the capital market, the higher” the rate of return on capital is in comparison to the rate of growth of the economy. The higher this ratio is, the greater inequality is."

Capitalism IS the problem.

I'm still reading LOTS of links but I got so excited when I read this I had to share.

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I agree, GM.

I don't see how SCOTUS could hold that the term "general welfare" includes the various forms of welfare you named.

The Court might, however, not want to anger the people who fund them.

In a democracy the government's job is not only to protect the country from foreign invaders but also to protect the citizenry from those among the rich and powerful who would take advantage of their (largely unearned) positions of power.

But what has to be understood is that it's not (by and large) evil capitalists who are out to enrich themselves at the expense of the working class. It's the system itself that's the problem. For example let's say a bill is introduced to raise corporate tax for the richest companies by 10%. Such a large increase would warrant a sizeable response from the owners. They would be willing to allocate hundreds of millions to sway politicians (the few that are not on their payroll already) to defeat the bill. Such opposition is NECESSARY! The boards of directors are responsible to shareholders to maximize profits. They will do whatever is necessary (up to the point of diminishing returns) to stop any assault on their profits. If they don't, they SHOULD be replaced! They will complain that the tax increase would bankrupt them, that it would put thousands out of work, that the economy will crash.

What, lately, people - including politicians have forgotten is that this opposition is THEIR JOB. If they fail to stop the tax increase, no one will really care - as long as the functionaries have done all they can. The executives will continue to collect their salaries and bonuses and, the next day, they will simply start to structure their business in response to the tax increase. The problems come when politicians BELIEVE the corporate propaganda - manufactured simply as part of their job of protecting company profits.

Contrary to the Roberts gang, corporations are not people - with their human emotions. They don't hold grudges. They don't seek revenge. They don't sulk. They just get on with business.

For example let's say a bill is introduced to raise corporate tax for the richest companies by 10%. Such a large increase would warrant a sizeable response from the owners. They would be willing to allocate hundreds of millions to sway politicians (the few that are not on their payroll already) to defeat the bill. Such opposition is NECESSARY! The boards of directors are responsible to shareholders to maximize profits. They will do whatever is necessary (up to the point of diminishing returns) to stop any assault on their profits. If they don't, they SHOULD be replaced!

This is where Piketty's solution of "involve political & capital controls" comes into play. With legislative reforms of lobbying and campaign finance, captains of industry couldn't buy members of Congress anymore.

For added perspective, consider how many of the richest US companies routinely spend more on lobbying than they "pay" in taxes. Thanks to the aforementioned corruption many of them have negative tax liability: corporate welfare in action.

But don't look for any such "political & capital controls" anytime soon. The kangaroos on the Rehnquist and Roberts Supreme Courts have decreed that corporations are people and limitless corporate spending on election campaigns is free speech, protected by the Constitution. Despite that a strong bipartisan majority of the public is against this, it doesn't matter. Nothing short of a Constitutional amendment will end it. The corruption will continue unabated.

Warner Brothers Chairman: How much is that adorable little Senator from Vermont?
Senator Leahy: Give me $371,156, put me in three movies, and I'll sponsor a tough new law just for you!
Warner Brothers Chairman: Sold! Wrap him up, Heath!

They will complain that the tax increase would bankrupt them, that it would put thousands out of work, that the economy will crash.

Yes, that's the standard battle cry of the top earners. Tax us at your peril. It'll kill the economy.

But this dubious claim has little traction with reputable economists (including Nobel laureate Paul Krugman) or the US Congressional Budget Office. The data of the last 75 years shows no significant correlation between higher taxes on the wealthy and decreases in economic growth. Take capital gains (the chief source of income for top earners) as one example.

Company

US profits Taxes
paid
Lobbying expense
General Electric $10.46 billion - $4.737 billion $84.35 million
PG&E $4.855 billion - $1.027 billion $78.99 million
Verizon Comm. $32.518 billion - $951 million $52.34 million
Wells Fargo $49.37 billion - $681 million $11.04 million
American Electric $5.899 billion - $545 million $28.85 million
Pepco Holdings $882 million - $508 million $3.76 million
Computer Sciences $1.666 billion - $305 million $4.39 million
CenterPoint Energy $1.931 billion - $284 million $2.65 million
NiSource $1.385 billion - $227 million $1.83 million
Duke Energy $5.475 billion - $216 million $17.47 million
Boeing $9.735 billion - $178 million $52.29 million
NextEra Energy $6.403 billion - $139 million $9.99 million
Con. Edison $4.263 billion - $127 million $1.79 million
Paccar $365 million - $112 million $760,000
Integrys Energy $818 million - $92 million $710,000
Wisconsin Energy $1.725 billion - $85 million $2.45 million
DuPont $2.124 billion - $72 million $13.75 million
Baxter International $926 million - $66 million $10.45 million
Tenet Healthcare $415 million - $48 million $3.43 million
Ryder System $627 million - $46 million $960,000
El Paso Corp. $4.105 billion - $41 million $2.94 million
Honeywell $4.903 billion - $34 million $18.3 million
CMS Energy $1.292 billion - $29 million $3.48 million
Con-Way $286 million - $26 million $2.29 million
Navistar $896 million - $18 million $6.31 million
DTE Energy $2.551 billion - $17 million $4.37 million
Interpublic Group $571 million - $15 million $1.30 million
Mattel $1.02 billion - $9 million $840,000
Corning $1.977 billion - $4 million $2.81 million
FedEx $4.247 billion $37 million $50.81 million
TOTAL $163.79 billion - $10.6 billion $475.67 million

 

Wow. Most elucidating. Thanks, Gallup. I hope (and assume) you earn a good living utilizing your formidable research skills.

Constitution amendment: No elected official shall receive, in addition to their salary, a single cup of coffee (or equivalent) in gifts, bonuses, salary, dividends, or any other recompense of any kind for the duration of their term of office.

:-)

Most would consider that to be a bit extreme. I honestly don't.

Wow. Most elucidating. Thanks, Gallup. I hope (and assume) you earn a good living utilizing your formidable research skills.

Thanks for the compliment. I left the world of full-time employment to write a novel so these days most of my reading and research goes toward that effort. It's going well enough to hope (but not quite assume) it'll lead to a decent payday, if not a good living.

Constitution amendment: No elected official shall receive, in addition to their salary, a single cup of coffee (or equivalent) in gifts, bonuses, salary, dividends, or any other recompense of any kind for the duration of their term of office. :-) Most would consider that to be a bit extreme. I honestly don't.

What do you think of this one? It says corporations are not people and spending money to buy elected officials and elections is not free speech. It's been relegated to a lingering death in committee unless several million people do something.

--------------------

The (Proposed) 28th Amendment to the Constitution of the United States

Section 1. The rights protected by the Constitution of the United States are the rights of natural persons only. Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law. The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable.

Section 2. Federal, State, and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate's own contributions and expenditures, to ensure that all citizens, regardless of their economic status, have access to the political process, and that no person gains, as a result of their money, substantially more access or ability to influence in any way the election of any candidate for public office or any ballot measure. Federal, State, and local government shall require that any permissible contributions and expenditures be publicly disclosed. The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.

Section 3. Nothing contained in this amendment shall be construed to abridge the freedom of the press.

I like Section 1. I prefer my amendment to that Section 2. Mine establishes what is meant by "permissible contributions" - namely NONE. Of course this means establishing a mechanism for fairly funding election campaigns.

To tell the truth I prefer the idea of starting over completely. This ricketty old constitution is WAY past Jefferson's suggested use-by date of 19 years. Then we could do things like the electoral college and removing ambiguity from ownership of weapons. In general moving from the eighteenth to the twenty-first centuries seems like the best idea.

totally agree

What i find unbelievable is that these companies averaged a 6.5% tax rate.

Perhaps Gallup could clarify. To me it reads MINUS - these companies did not PAY tax at all, they RECEIVED 6.5% of their income from the government in the form of subsidies or whatever.

Perhaps Gallup could clarify. To me it reads MINUS - these companies did not PAY tax at all, they RECEIVED 6.5% of their income from the government in the form of subsidies or whatever.

Yes, that's right. The minus indicates negative tax liability; tax exemptions, tax deductions, tax credits, etc. Under US law, tax breaks are subsidies.

If that list of 30 companies didn't make you feel crazy enough, read this comprehensive study of 280 of America’s most profitable companies. Some high(low)lights:

  • 78 of them paid no federal income tax in at least one of the last three years (of the study).
  • 30 companies had negative income tax rates over the same three year period, on combined pre-tax profits of $160 billion.
  • All 280 received a combined total of nearly $223 billion in tax subsidies.

There are plenty of back scratchers and plenty of itchy backs.

GM and others:

I hope you all see that when the incomes of businesses are taxed, they pass the costs along to their customers, which means that these taxes are hidden.

I hope you all oppose taxation that's hidden from the people who pay it,

Mike, your proposal is less extreme than the reporting requirements for effective enforcement. That's the rub.

"I hope you all see that when the incomes of businesses are taxed, they pass the costs along to their customers"

Sorry, Tom. Largely untrue. The EXCESS income that SHOULD be taxed is, instead, being stashed. Why do you think company profits are at their highest ever. All income - few expenses. Owner are taking money that SHOULD have gone into a decent wage and health insurance for their workers and are instead building villas in the South of France or Tahiti or the Caymans where they can hide with their fortunes untouched by the pesky tax man. Instead of allowing us to build airports, bridges, and schools, this money is going to further enrich those who names we're not allowed to know. 

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