"The Pitchforks Are Coming For Us Plutocrats" op-ed

[glenn1]

Some red meat for our resident leftists. I personally think it's a load of crap - the apologia of someone who knows the pitchforks aren't coming from the poor but rather middle class populist progressives who want to "stick it to the rich." Unlike the French Revolution, modern revolutions are almost universally led from the upper-middle or low end of the upper class overthrowing the top of the upper class - Lenin, Mao, and Castro come to mind. The author of the piece probably fears some of the posters here on ATPN more than he does the supposed "poor person with a pitchfork" whose 'revolutions' consists of periodic riots and lootings in their own neighborhoods.


http://www.politico.com/magazine/st...ng-for-us-plutocrats-108014.html#.U61wHvldWZk

 

[Atreus21]

Why is there such wealth inequality?

He's wrong here:

If you took Econ 101, then you literally were taught that if wages go up, employment must go down.

No, we were literally taught that price floors create shortages.

 

[Engineer]

Why is there such wealth inequality?

If I were guessing, I would say the massive fed printing of money (stays at or flows to the top) coupled with middle class jobs being cut (jobs, stagnant wages, cut benefits, etc.). Throw in super low tax rates on capital gains.

I'm sure there are many more reasons....

 

[fskimospy]

Why is there such wealth inequality?

He's wrong here:

No, we were literally taught that price floors create shortages.

I think you mean price ceilings create shortages. Price floors do the opposite.

 

[Oldgamer]

Quote: If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

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

This is already happening, see the SWAT police and militarization of America threads. Corps and wealthy politicians and elected officials are positioning local law enforcement to deal with the "pitchforks" when they come out to protect themselves and their wealthy Corporations.

 

[Atreus21]

If I were guessing, I would say the massive fed printing of money (stays at or flows to the top) coupled with middle class jobs being cut (jobs, stagnant wages, cut benefits, etc.). Throw in super low tax rates on capital gains.

I'm sure there are many more reasons....

Frankly, I think all income should be taxed at the same rate. I realize they're trying to incentivize investment, but screw it. Treat all income the same.

 

[theeedude]

These people got the political system they paid for. If the end result is pitch forks for them, well, then they bought the wrong one

 

[fskimospy]

Frankly, I think all income should be taxed at the same rate. I realize they're trying to incentivize investment, but screw it. Treat all income the same.

That's not a good idea because of inflation. Investment income is from money that you've basically deferred using for awhile, which means that inflation has taken its toll on it. That's why short term capital gains are taxed at your normal rate but long term gains are taxed at a reduced one.

IMO we should make capital gains taxes more progressive than they currently are.

 

[Anarchist420]

If I were guessing, I would say the massive fed printing of money (stays at or flows to the top) coupled with middle class jobs being cut (jobs, stagnant wages, cut benefits, etc.). Throw in super low tax rates on capital gains. I'm sure there are many more reasons....

actually, the inflation caused by the fed would be boosted by capital gains revenue increases because then a lot more money would be put into circulation. and the banking cartel's monopoly is dependent on capital gains taxes combined with legal tender and and the u.s.g. restricting private minting.

 

[Atreus21]

That's not a good idea because of inflation. Investment income is from money that you've basically deferred using for awhile, which means that inflation has taken its toll on it. That's why short term capital gains are taxed at your normal rate but long term gains are taxed at a reduced one.

IMO we should make capital gains taxes more progressive than they currently are.

Long term or short term or both?

I don't like using taxes to right social problems.

 

[fskimospy]

Long term or short term or both?

I don't like using taxes to right social problems.

Short term capital gains are exactly as progressive as our current tax system as they are taxed at whatever rate your income from wages is. Yes though, I would like to increase the progressivity of long term capital gains.

If you don't like using taxes to address income and wealth inequality, what measure would you like to use instead and why do you think it would be effective?

 

[glenn1]

Short term capital gains are exactly as progressive as our current tax system as they are taxed at whatever rate your income from wages is. Yes though, I would like to increase the progressivity of long term capital gains.

If you don't like using taxes to address income and wealth inequality, what measure would you like to use instead and why do you think it would be effective?

If you want to raise LTCG rates, are you going to include inflation indexing into calculating the gain? As you pointed out earlier the reason for lower long term rates is to account for inflation effects on the investment.

 

[Jaskalas]

Why is there such wealth inequality?

Because markets are played like commodities themselves. Where having money puts you into a position of reaping all the rewards, to buy political persuasion, to offshore your costs, and dodge real taxation through capital gains.

People making 6 figures don't get that kind of power, they get a 50%+ tax bill. They get lawsuits they cannot afford or that they lose. They get to slog through US wages and regulations (EPA, OSHA)... while the big boys play in Asia.

Because wages have gone down compared to the cost of living. (Inflation is a diff measure) When both parents work jobs they struggle to match what a single worker earned 50 years ago. It is not a bonus for your spouse to work - it's a requirement. Then if anyone gets sick, there's no one available to step up, you're both already doing as much as you possibly can with no free time to sacrifice in an emergency. So if someone breaks a leg and is out of work - you're finished.

The job market is tighter than ever. Manufacturing and IT moved overseas. Immigrants FLOOD in to take construction, cooking, cleaning, all sorts of labor. But they still live in poverty. With such competition for jobs, wages go down.

We also dump what little we have into gadgets, toys, services we never used to have. Does the cell phone increase your wealth, or does it suck $100-200 a month? Many examples of people not saving, of throwing their wealth into expenses they don't need or never used to incur.

Kids come out of college today with massive debts, and probably work the rest of their lives to pay them off. Got no time or money to save up for a potential investment, for a leap forward in social status. You're a worker bee keeping your head above water from dawn til dusk.

- Wall-Street is King
- Small Business is crushed
- Adding a second worker to family was no advantage
- High paying jobs went overseas
- Many labor jobs go to impoverished immigrants
- We buy many new toys, they don't increase our wealth
- Working Class is in debt, cannot save up to make investments.
​

He's wrong here:

If you took Econ 101, then you literally were taught that if wages go up, employment must go down.

Employment doesn't HAVE to go down, but it typically will as businesses are afraid of raising prices and losing customers. Especially the larger ones who are owned by stock holders, if they risk profits they risk everything. Better to squeeze the workers than squeeze your life's blood (profits).

Even noblemen who would want to eat the cost, have bosses to answer to.

 

[Atreus21]

Short term capital gains are exactly as progressive as our current tax system as they are taxed at whatever rate your income from wages is. Yes though, I would like to increase the progressivity of long term capital gains.

If you don't like using taxes to address income and wealth inequality, what measure would you like to use instead and why do you think it would be effective?

I'm not sure what metric is best. One that conforms in some way to an agreed-upon budget. Not as a tool by which wealth is extracted from one man we don't like to give to another we do.

 

[fskimospy]

If you want to raise LTCG rates, are you going to include inflation indexing into calculating the gain? As you pointed out earlier the reason for lower long term rates is to account for inflation effects on the investment.

No, I would just raise the top rates on LTCG. It's currently at 20% for the top bracket and their federal income tax rate is 39.6%. There's a lot of room between the two to increase LTCG without making the two equivalent.

 

[glenn1]

No, I would just raise the top rates on LTCG. It's currently at 20% for the top bracket and their federal income tax rate is 39.6%. There's a lot of room between the two to increase LTCG without making the two equivalent.

So basically you want to discourage long term investment in favor of rapid trading and profit taking. You favor that middle class buy-and-hold and retired investors pay more, hopefully even getting negative returns after accounting for inflation and gains tax. That sounds like a great way of helping widen wealth inequality even more.

 

[fskimospy]

So basically you want to discourage long term investment in favor of rapid trading and profit taking. You favor that middle class buy-and-hold and retired investors pay more, hopefully even getting negative returns after accounting for inflation and gains tax. That sounds like a great way of helping widen wealth inequality even more.

This is a baffling post that seems completely divorced from reality and from what I wrote. I want to raise the capital gains rates on the highest income earners; this is by definition not the middle class.

 

[glenn1]

This is a baffling post that seems completely divorced from reality and from what I wrote. I want to raise the capital gains rates on the high earners; this is by definition not the middle class.

Because when middle class people sell an investment and realize the capital gains it typically pushes them into a higher bracket for the year even though they are hardly "rich". Older middle class person sells some of the Disney shares he's owned for 40 years to pay bills after retirement, now you want to punish his thrift and foresight by higher tax rates. I guess you think that's cool because he had a one year "windfall" and is suddenly "rich" so you nake sure he goes right back to eating cat food. And that's even leaving aside the policy implications of further incentivizing short term trading vs long term.

 

[Jaskalas]

"The Pitchforks Are Coming… For Us Plutocrats" op-ed
http://www.politico.com/magazine/st...ng-for-us-plutocrats-108014.html#.U61wHvldWZk

I always found the notion of minimum wage to be better than welfare programs and government concentration of wealth and power. Yet Nick Hanauer takes this ball and scores a home run.

His logic is sound, his argument is reasoned, and his voice is heard.

 

[fskimospy]

Because when middle class people sell an investment and realize the capital gains it typically pushes them into a higher bracket for the year even though they are hardly "rich". Older middle class person sells some of the Disney shares he's owned for 40 years to pay bills after retirement, now you want to punish his thrift and foresight by higher tax rates. I guess you think that's cool because he had a one year "windfall" and is suddenly "rich" so you nake sure he goes right back to eating cat food. And that's even leaving aside the policy implications of further incentivizing short term trading vs long term.

I'm interested to hear what bills there are where our older middle class person is temporarily pushing his yearly income past $400,000.

I always like to hear the fantastical stories you guys invent in order to justify not raising taxes on the extraordinarily wealthy.

 

[Atreus21]

I liked his appeal to other wealthy business owners to treat their employees right. That's a good starting point. My employer certainly takes that advice to heart.

 

[Engineer]

I liked his appeal to other wealthy business owners to treat their employees right. That's a good starting point. My employer certainly takes that advice to heart.

I also liked that. IIRC, Henry Ford doubled his employ wages because he knew that they could not buy the very product that they were making if not. Too many employers don't realize (or don't care) that the very people that they keep cutting are the very customers that buy the products. Of course, debt and other bubbles keep the party going for a while but at some point, those pop and then the pitchforks come out.

 

[FerrelGeek]

Because when middle class people sell an investment and realize the capital gains it typically pushes them into a higher bracket for the year even though they are hardly "rich". Older middle class person sells some of the Disney shares he's owned for 40 years to pay bills after retirement, now you want to punish his thrift and foresight by higher tax rates. I guess you think that's cool because he had a one year "windfall" and is suddenly "rich" so you nake sure he goes right back to eating cat food. And that's even leaving aside the policy implications of further incentivizing short term trading vs long term.

When Joe middle class sells his investment at retirement, he's still in a far different class that Warren Buffet. When Joe retires, he's not going to (most likely) cash in his entire 401k in one shot. He'll cash in what he needs at a given time, which will keep him at normal tax levels for someone making a modest income. When Warren cashes in $20 mil, you're getting into the realm that eskimo is talking about for the higher tax rate.

 

[Engineer]

When Joe middle class sells his investment at retirement, he's still in a far different class that Warren Buffet. When Joe retires, he's not going to (most likely) cash in his entire 401k in one shot. He'll cash in what he needs at a given time, which will keep him at normal tax levels for someone making a modest income. When Warren cashes in $20 mil, you're getting into the realm that eskimo is talking about for the higher tax rate.

When Joe middle class sells his 401k, he's going to pay whatever the marginal rates on it as 401k (regular) is treated 100% as income, whatever the amount may be with no care about capital gains, either short or long. Of course, Roth varieties are already taxed when putting the money in and there are no taxes on the gains (well, except those states that have only sales taxes and then you pay on your Roth indirectly).

 

[Newell Steamer]

I'd eat the rich, but diseased donkey diarrhea is not appetizing.

The rich will be just fine. No one will ever touch them.