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View Full Version : Economics The Rich Gets 99% Of The Tax Breaks, While Deficit Is Everyone's Problem


KILLER_CLOWN
07-25-2011, 11:51 AM
F. Scott Fitzgerald once said: "The rich are different than you and me - they have more money." As Bill Domhoff pointed out, when we talk about the rich, we don't mean the top 1% - people who "only" make $1.6M a year or more.

Sure those of us in that group may have a "get out of jail free" card for when we speed. But when you move up to the top 0.1% ($36M or higher per year income) or the top 0.01% ($450M or higher annual income)--where Rupert Murdoch lives--not only do you get both national and international laws rewritten to suit your needs, but the other laws don't even apply to you.

This lack of accountability leads to increasing bad behavior, as evidenced by our own financial crisis, where God's Workers screwed their own clients and yet not a single arrest has been made other than finally shutting down one Ponzi scheme so that the rest of Wall Street can point to Madoff and say - "See, people were arrested" - even though he had NOTHING to do with the sub-prime lending or CDS fiascos that destroyed the US economy and cost the taxpayers (so far) $9 Trillion Dollars or 180 times more than the size of Madoff's entire fund, much of which has now been recovered.

Unlike Madoff victims, the victims of the Banksters will never have a special prosecutor on their side with the power to recover our money.

That's because just 10 banks, most in the famous international "Gang of 12" which includes both Murdoch and GE (both of whom control the media - especially the Financial Media) own 77% of our nation's banking assets. That's 40% up from 55% back in 2002, when deregulation let these banks go totally wild. GS, MS , JPM, C, BAC and WFC are the 6 top US banks with $10 Trillion in assets between them.

Others in our Gang of 12 are the EU powerhouses of CS, DB, BCS and Nomura in Japan - they are the masters of the financial universe and the expression applies to any of the majors who use their assets to influence the Global Economy in pursuit of (what else?) more wealth.

Our current tax structure does not simply allow but ENCOURAGES wealth to pool into the hands of the relatively few. $10 Trillion (Tn) in the hands of 6 US banks represents a 40% increase ($4Tn) over 2002. If we work that backwards then we see that there USED to be $4Tn in the bottom 99% that has now been transferred to the top 1%.

http://3.bp.blogspot.com/-zYV8hIsvYng/TiOmO0u2FYI/AAAAAAAARSA/C8VMrtNzDEI/s400/Corporate-tax-color-e1303130022237.png

http://3.bp.blogspot.com/-bUs6EK7pHMQ/TiOiC-sFLMI/AAAAAAAARR8/yaEdzUHZGcA/s640/final-chart.png

So the poor banks (and the poor people who bank there) used to have 45% of the nation's assets just 9 years ago. But look on the bright side - they STILL have 23%.

As you can see from the charts here, the US already taxes our Corporations and Citizens FAR less than almost any other nation on Earth. That, of course, had led us to run up TREMENDOUS deficits, to the point where we had to borrow $15 Trillion - just to keep pretending we could run our Government without collecting the taxes to pay for it. That's BRILLIANT though because the rich people get 99% of the tax breaks while the deficit is EVERYONE's problem.

In fact, for the past few years, our Federal Reserve has placed a stealth tax on ALL of the American people by devaluing our Dollar by 15%. The cool thing about taxing the population by devaluing the currency is it's not just a tax on one year's earnings but a tax on everything they have worked to accumulate over their entire lives! That's right - through inflation, the Fed is able to reach into your bank account and under your mattress and, of course, into your home equity and take 15% of EVERYTHING you have - whether you declare it or not.

http://4.bp.blogspot.com/-QH1EphuZg48/TiO1304awII/AAAAAAAARSY/BEIRRLojQ9I/s1600/low_tax.png

There are no loopholes (which are now over $1Tn a year for the top 1%) to escape from inflation unless, of course, you are a Member of the investing class and you own stocks or commodities or collectibles that rise against inflation.

At this point, as Charles Hugh Smith points out, the bottom 80% have just 7% of the Financial Wealth left and own just 8.9% of all stocks so these engineered market rallies are not helping those who need help the most. Then they are on TV telling us that we can pay off the deficit (the one we built up because the rich people didn't pay their taxes) by gutting the retirement accounts of the bottom 80%.

Forgetting the fact that a person who worked for 40 years and had 10% of his income (call it an inflation-adjusted $25,000 since we're talking bottom 80%) removed every year - even at just 4% interest, should have $259,068 coming to them (10 years of full Social Security checks) - forgetting the great crime we are all planning on perpetrating against these people who have been counting on this money (THEIR MONEY) coming back to them in their old age - what is the actual end game planned for when we do stop giving 40M people their retirement checks?

Do I have a solution for this? No, I do not (not one that would be politically acceptable anyway). All we can do is to get as rich as possible before this whole mess comes unglued so we can be one of "THEM" ourselves! Along those lines, we went long on the S&P on July 18 as the market bottomed out in the afternoon with aggressive bullish plays on both SSO and SPY and those should be helping us get closer to goal with a combination of positive earnings reports and much improved housing starts.

We'll see how our lines hold up and may actually have a reason to make some more bullish picks but, for now, we remain cashy and cautious.

[Note - This is an edited version by EconMatters from author's original post.]

About The Author - Ilene is the editor and affiliate director at Phil's Stock World with a fascination with the markets. She also maintains a blog at Phil's Favorites.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

EconMatters, July 23, 2011

http://www.econmatters.com/2011/07/rich-gets-99-of-tax-breaks-while.html

VAChief
07-25-2011, 01:22 PM
I read recently that there are 400 Americans who make more than the bottom 150 million Americans combined. Not exactly related, but still a pretty staggering number.

loochy
07-25-2011, 01:24 PM
I read recently that there are 400 Americans who make more than the bottom 150 million Americans combined. Not exactly related, but still a pretty staggering number.

What a shame. We can't have that! We'd better take their money and give it to ourselves. That'll even things out!

HonestChieffan
07-25-2011, 01:49 PM
If 50% of the wage earners pay zero fed income tax, how come they are not considered as getting a tax break?

KCWolfman
07-25-2011, 02:37 PM
How can the deficit be everyone's problem when 50% of this nation not only does not pay federal taxes but get kickbacks from tax returns if they qualify for EIC or other government programs?

The math doesn't add up.

KILLER_CLOWN
07-25-2011, 02:45 PM
So long middle class, it was nice knowing you.

KILLER_CLOWN
07-25-2011, 02:45 PM
What a shame. We can't have that! We'd better take their money and give it to ourselves. That'll even things out!

Do you really think that has any chance of happening?

Pants
07-25-2011, 02:47 PM
Do you really think that has any chance of happening?
:facepalm:

VAChief
07-25-2011, 03:07 PM
What a shame. We can't have that! We'd better take their money and give it to ourselves. That'll even things out!

Who said anything about taking their money? Just waiting for the trickle down effect we hear so much about. The last 30 years the gap keeps getting wider whether the economy is up or down.

loochy
07-25-2011, 03:08 PM
Who said anything about taking their money? Just waiting for the trickle down effect we hear so much about. The last 30 years the gap keeps getting wider whether the economy is up or down.

I'm just bitching because I hate the idea of unequal taxation.

loochy
07-25-2011, 03:09 PM
Do you really think that has any chance of happening?

I don't.

vailpass
07-25-2011, 03:09 PM
Anyone else think it might be healthy for him if KillerClown took a break from creating threads?

VAChief
07-25-2011, 03:17 PM
I'm just bitching because I hate the idea of unequal taxation.

I understand the point...their is a point of view as well that fair is not necessarily equal.

KCWolfman
07-25-2011, 03:29 PM
Who said anything about taking their money? Just waiting for the trickle down effect we hear so much about. The last 30 years the gap keeps getting wider whether the economy is up or down.

The gap does increase yet the quality of life, even for the poor increases dramatically.

Calcountry
07-25-2011, 03:39 PM
I am sick of peopleA(in aggregate) bitching about other peopleB(in aggregate) not paying their fair share when peopleA don't pay a phuquing DIME and receive benefits.

BucEyedPea
07-25-2011, 03:46 PM
The gap is getting wider because the more govt we get, the more it needs revenue that goes to bureaucrats, commissars or what one could label the apparatchik class. The same way it works in a super-socialism. This is due to increasing welfare state funded by Keynesian economics which eventually impoverishes the lower, middle-classes and those on fixed incomes.

KCWolfman
07-25-2011, 03:47 PM
The gap is getting wider because the more govt we get, the more it needs revenue that goes to bureaucrats, commissars or what one could label the apparatchik class. This is due to increasing welfare state funded by Keyenesian economics which eventually impoverishes the lower, middle-classes and those on fixed incomes.

I wouldn't say impoverish compared to a great many other nations - it certainly enslaves them and creates a fear that their monetary crack can be taken from them if they don't vote properly.

BucEyedPea
07-25-2011, 03:55 PM
I wouldn't say impoverish compared to a great many other nations - it certainly enslaves them and creates a fear that their monetary crack can be taken from them if they don't vote properly.

The gap is increasing and the standard of living is getting more expensive. That's what I mean by impoverishing. The left isn't all wrong here. Their assignment of causes though are and leads to wrong policies which make it worse.

petegz28
07-25-2011, 04:24 PM
All I know is my job depends on a bunch of rich lawyers paying for me to have a job at their firm. If them getting tax breaks means me having a job then more power to the tax breaks.

petegz28
07-25-2011, 04:26 PM
The gap is increasing and the standard of living is getting more expensive. That's what I mean by impoverishing. The left isn't all wrong here. Their assignment of causes though are and leads to wrong policies which make it worse.

The problem with the Left is they want to take care of you. Therefore for them to be able to do so effectively everyone they want to care for must eventually sink to the lowest common denominator. Generally speaking, of course.

Backwards Masking
07-25-2011, 10:50 PM
The gap is increasing and the standard of living is getting more expensive. That's what I mean by impoverishing. The left isn't all wrong here. Their assignment of causes though are and leads to wrong policies which make it worse.

Good post. The gap between the lower and "middle" classes indeed gets smaller everyday.

When one works 40 plus hours a week and is technically free from dependance on government but earns less money and has less possesions and stands to make less money than someone dependent on the government for assitance, the person working 40 hours week starts wondering if their "freedom" is worth it. And if you can't beat em, join em. That's why assistance problems are indeed the wrong policies the left supports that makes the situation worse.

BWillie
07-25-2011, 11:00 PM
The rich pay way way more anyway. Just like any country we have a highly progressive tax system. You know what pisses me off more than the rich not paying more taxes? That bitch with 6 kids who is poor as sh** but won't stop having them.

KILLER_CLOWN
07-26-2011, 01:38 AM
The rich pay way way more anyway. Just like any country we have a highly progressive tax system. You know what pisses me off more than the rich not paying more taxes? That bitch with 6 kids who is poor as sh** but won't stop having them.

It's an endless cycle, the corporations/banks that abuse the system need those that require handouts so everyone can blame them while the filthy rich take over larger and larger shares and destroy the middle class. The answer is a smaller government with less power which in turn would take power from those behind it. If you aren't willing to sieze the power from those on top you won't stop what trickles down to those looking for freebies. It's really quite a scam and until those on the left and right realise it, the situation has no chance of changing for the better.

ThatRaceCardGuy
07-26-2011, 05:41 AM
I am sick of peopleA(in aggregate) bitching about other peopleB(in aggregate) not paying their fair share when peopleA don't pay a phuquing DIME and receive benefits.

But you're fine with the rich getting tax breaks , while the middle class takes on the brunt of paying taxes in this country? You and the rest of the right wingers bitch and moan about the poor and how they don't contribute...but you want to protect the rich and their taxes?

ThatRaceCardGuy
07-26-2011, 05:42 AM
It's an endless cycle, the corporations/banks that abuse the system need those that require handouts so everyone can blame them while the filthy rich take over larger and larger shares and destroy the middle class. The answer is a smaller government with less power which in turn would take power from those behind it. If you aren't willing to sieze the power from those on top you won't stop what trickles down to those looking for freebies. It's really quite a scam and until those on the left and right realise it, the situation has no chance of changing for the better.

Truth.

VAChief
07-26-2011, 07:41 AM
The rich pay way way more anyway. Just like any country we have a highly progressive tax system. You know what pisses me off more than the rich not paying more taxes? That bitch with 6 kids who is poor as sh** but won't stop having them.

Yes, those people should make everyone furious. Where do you think reform would have the biggest effect on incoming revenues? Those that game the system at the top or bottom? If the top 400 wealthiest Americans have more than the bottom 150 millions COMBINED it would seem unwise to focus on the individuals making pennies in comparison only.

I think it would be foolish to drastically raise any taxes at this time, however the tax cuts at the beginning of the last decade did not produce as promised. We need to cut spending for sure, but those making billions on the market are not reinvesting as expected voluntarily.

petegz28
07-26-2011, 07:47 AM
Yes, those people should make everyone furious. Where do you think reform would have the biggest effect on incoming revenues? Those that game the system at the top or bottom? If the top 400 wealthiest Americans have more than the bottom 150 millions COMBINED it would seem unwise to focus on the individuals making pennies in comparison only.

I think it would be foolish to drastically raise any taxes at this time, however the tax cuts at the beginning of the last decade did not produce as promised. We need to cut spending for sure, but those making billions on the market are not reinvesting as expected voluntarily.

You're out of your mind if you think they aren't re-investing. They most certainly are. Just not in this country because the business environment in places like China, India and Brazil are a lot more conducive to investment. Perhaps we should take a look at our business environment and make some needed changes so the money comes back here, heh?

VAChief
07-26-2011, 08:17 AM
You're out of your mind if you think they aren't re-investing. They most certainly are. Just not in this country because the business environment in places like China, India and Brazil are a lot more conducive to investment. Perhaps we should take a look at our business environment and make some needed changes so the money comes back here, heh?

I'm not disagreeing with you, this was in response to the "Welfare Queen" focus that often comes up as the root of all that ails us. If tax cuts produce jobs and reinvesting in this country...why has it seemingly failed miserably to produce the intended effect? I would be all for cutting all Corporate Taxes if they keep the money and jobs here. I would be all for cutting child tax credits and reducing the top rate, if ALL upper tax breaks were deleted as well.

I find it puzzling that often the focus on tax cheats falls on those that don't have while those that are reaping huge benefits in a down economy are given a free pass.

KCWolfman
07-26-2011, 08:47 AM
I think it would be foolish to drastically raise any taxes at this time, however the tax cuts at the beginning of the last decade did not produce as promised. We need to cut spending for sure, but those making billions on the market are not reinvesting as expected voluntarily.

This statement will be one of the 5 most important made over the next election.

Please remember this statement when President Obama starts with "Without my stimulus package, things would have been much worse."

Those who believe reduced taxation for the last 10 years has reaped this country rewards and saved us from an even worse spiral are almost as much as an extremist as those who would follow the President's concept above. Honestly, I agree with VAChief, I don't think it has helped the economy in huge gluts. I do think that paying more than 30% of your earnings in taxes is ridiculous though, even if you earned 25,000,000. I also think that paying taxes on your hard earned retirement funds is atrocious. I think any double dip is theft from our government.

Why is it the lower class (and liberals in office) fight against tax reform so harshly? A simplified tax code would remove any doubt that the wealthy would be paying "their fair share". A flat tax WITH ALL "LOOPHOLES" removed (including EIC and mortgage credits) would be the most equitable and profitable system. It would reduce so much waste and actually eliminate millions of true PARASITIC government jobs. Anyone earning less than 200,000 a year and fighting against a flat tax system is akin to cow fighting for the right to stand in line at the slaughterhouse.

Chief Roundup
07-26-2011, 08:59 AM
I think it would be foolish to drastically raise any taxes at this time, however the tax cuts at the beginning of the last decade did not produce as promised. We need to cut spending for sure, but those making billions on the market are not reinvesting as expected voluntarily.

They sure are not reinvesting that money. They are just keeping it. Building a dance floor in thier homes, buying bigger boats, spending it abroad instead of here by making trips all over the country.
The rich do not reinvest those tax breaks therefore they should not be getting them.

http://www.huffingtonpost.com/2011/06/06/patriotic-millionaires-bush-tax-cuts_n_871840.html?icid=maing-grid7%7Cmain5%7Cdl1%7Csec3_lnk2%7C68733

mlyonsd
07-26-2011, 09:02 AM
This statement will be one of the 5 most important made over the next election.

Please remember this statement when President Obama starts with "Without my stimulus package, things would have been much worse."

Those who believe reduced taxation for the last 10 years has reaped this country rewards and saved us from an even worse spiral are almost as much as an extremist as those who would follow the President's concept above. Honestly, I agree with VAChief, I don't think it has helped the economy in huge gluts. I do think that paying more than 30% of your earnings in taxes is ridiculous though, even if you earned 25,000,000. I also think that paying taxes on your hard earned retirement funds is atrocious. I think any double dip is theft from our government.

Why is it the lower class (and liberals in office) fight against tax reform so harshly? A simplified tax code would remove any doubt that the wealthy would be paying "their fair share". A flat tax WITH ALL "LOOPHOLES" removed (including EIC and mortgage credits) would be the most equitable and profitable system. It would reduce so much waste and actually eliminate millions of true PARASITIC government jobs. Anyone earning less than 200,000 a year and fighting against a flat tax system is akin to cow fighting for the right to stand in line at the slaughterhouse.

Preaching to the choir buddy.

One thing you left out about the flat tax is if the vast majority of Americans paid taxes they would take more ownership in how the government is run and how it spends their money.

Now they just say to themselves, "Hey that black dude in the WH is looking out for me" when in reality he's only worried about his next election.

KCWolfman
07-26-2011, 09:05 AM
They sure are not reinvesting that money. They are just keeping it. Building a dance floor in thier homes, buying bigger boats, spending it abroad instead of here by making trips all over the country.
The rich do not reinvest those tax breaks therefore they should not be getting them.

http://www.huffingtonpost.com/2011/06/06/patriotic-millionaires-bush-tax-cuts_n_871840.html?icid=maing-grid7%7Cmain5%7Cdl1%7Csec3_lnk2%7C68733

Actually, unless that guy supplied his own labor he did reinvest his money on the "dance floor". The boat was purchased in Italy. I wonder how many people were actually interviewed before they found 3 that fit their bill, or made up the stories they wanted to hear?

I am betting for every "Boat bought in Italy" 50 or 60 thousand had decks built, paid landscapers more, bought cars sold by Americans, etc etc etc.

That story is obviously a poor version of extremism.

vailpass
07-26-2011, 10:47 AM
They sure are not reinvesting that money. They are just keeping it. Building a dance floor in thier homes, buying bigger boats, spending it abroad instead of here by making trips all over the country.
The rich do not reinvest those tax breaks therefore they should not be getting them.

http://www.huffingtonpost.com/2011/06/06/patriotic-millionaires-bush-tax-cuts_n_871840.html?icid=maing-grid7%7Cmain5%7Cdl1%7Csec3_lnk2%7C68733

Get that huffpo shit out of here.

ThatRaceCardGuy
07-26-2011, 03:30 PM
Get that huffpo shit out of here.

Why would you continue to neg rep me? Because I dont agree with your political views?

Calcountry
07-26-2011, 04:53 PM
They sure are not reinvesting that money. They are just keeping it. Building a dance floor in thier homes, buying bigger boats, spending it abroad instead of here by making trips all over the country.
The rich do not reinvest those tax breaks therefore they should not be getting them.

http://www.huffingtonpost.com/2011/06/06/patriotic-millionaires-bush-tax-cuts_n_871840.html?icid=maing-grid7%7Cmain5%7Cdl1%7Csec3_lnk2%7C68733 That would be good for the contractor that built it, the boat maker and seller and the detailier that would help supply the upkeep on the boat.

Why all the hate?

vailpass
07-27-2011, 10:15 AM
Why would you continue to neg rep me? Because I dont agree with your political views?

Nah. I just think you look good in red.