Where the money is

Over at Crooked Timber, there’s been an extensive neoliberalism (mainly, though not exclusively, in the US sense of this term, which is broadly akin to “Third Way” Labor”) and political theory. I’ve been largely on the sidelines. That’s mainly because, observing the US political and economic situation, I have a very clear view on what policies could, in principle, sustain a progressive political movement, but (given my distance from the scene and the absence of anything substantial enough to force its attention on the mass media) no real idea about how such a movement might develop. Here’s a post I put up there, slightly edited to remove some points that led to thread derailment.

My analysis is quite simple and follows the apocryphal statement attributed to Willie Sutton. The wealth that has accrued to those in the top 1 per cent of the US income distribution is so massive that any serious policy program must begin by clawing it back.[1]

If their 25 per cent, or the great bulk of it, is off-limits, then it’s impossible to see any good resolution of the current US crisis. It’s unsurprising that lots of voters are unwilling to pay higher taxes, even to prevent the complete collapse of public sector services. Median household income has been static or declining for the past decade, household wealth has fallen by something like 50 per cent (at least for ordinary households whose wealth, if they have any, is dominated by home equity) and the easy credit that made the whole process tolerable for decades has disappeared. In these circumstances, welshing on obligations to retired teachers, police officers and firefighters looks only fair.

In both policy and political terms, nothing can be achieved under these circumstances, except at the expense of the top 1 per cent. This is a contingent, but inescapable fact about massively unequal, and economically stagnant, societies like the US in 2010. By contrast, in a society like that of the 1950s and 1960s, where most people could plausibly regard themselves as middle class and where middle class incomes were steadily rising, the big questions could be put in terms of the mix of public goods and private income that was best for the representative middle class citizen. The question of how much (more) to tax the very rich was secondary – their share of national income was already at an all time low.

The problem is that most policy analysts and commentators grew up in the world of the 1950s and 1960s, or at least in the mental world created by that era. So, they are busy fighting about tax expenditures, barber licensing and teachers unions, and the implications of these things for a hypothetical working class mobilisation. Meanwhile, most of the anger created by the collapse of middle class America is being directed not at the rich but at those who don’t look, sound or pray like Americans of the vanished golden age.

fn1. When I was at the American Economic Association meetings in January I went to a session where a group of Very Serious Economists (Holtz-Eakin, Elmendorf and others) discussed the US budget problem, which comes down to the fact that on a structural basis US public expenditure exceeds revenue by something like 7 per cent of national income. I made the comment that this gap was almost exactly equal to the increase in the share of income going to the top 1 per cent of households over the last decade or so. The Very Serious Guys declined to respond, and waited for a serious question. I wasn’t surprised, but I wasn’t impressed either.

104 thoughts on “Where the money is

  1. Chris – to suspect something for which you have neither solid evidence for nor evidence against is not denialist. It’s called having a hunch. A denialist is somebody that maintains a position contrary to evidence. If you show me with evidence that the median for this group is not vastly lower than the average for this group then I’m more than happy to accept such evidence. Perhaps you can’t be bothered looking for the evidence which is fine but in that case we just have contrary hunches. I’m not going to call you a denialist merely because your hunch is different.

  2. @TerjeP

    Unfortunately when it comes to the distribution of wealth, introducing “hunches” is not appropriate. It is typical of capitalists who seek to deny and blur the underlying trends that are ravaging capitalist economies and are about to get dramatically worse.

    As 1% of the population control much of the wealth then by definition they are exceptionally wealthy. 1% of the population only has the right to around 1% of the wealth.

    Any statement that these 1%-ers are ‘not exceptionally wealthy”, now camouflaged as “suspect” or “hunch” is denialism.

  3. Terje should be able to do the research to answer his own query. Shouldn’t be hard. That is, if he was interested in having it answered.

  4. Chris – I think you miss the my point. You also make a strange claim about a “right to wealth” which I think is outrageous in the extreme and clearly shows a deep seated communist impulse but I’ll ignore it for the moment.

    JQ says that the top 1% have 25% of US income. Fred says they have 38% of the wealth. I merely asked what the median income is for this group.

    Fred offered the insight that their average wealth is $12 million or so. However the average wealth doesn’t tell us what the median income is or what the median wealth is.

    It may be that the median individual in this group is worth only $1.5 million which in many places merely means they own a nice house. Or it may be that the median is $10 million in which case these people are loaded. However we are not discussing a wealth tax so this is largely irrelevant anyway.

    What is more relevant is the median income. It may be that whilst the top 1% has 25% of the income the top 0.1% has 24% of the income. I don’t have the relevant data to inform on this point. However before implementing a “soak the rich” policy I think it would be reasonable to find out.

  5. Freelander – just because I haven’t done the research doesn’t mean I’m not interested in the answer.

  6. It’s not hard to find economies with wealth in the hands of a few, a small middle class and poverty. The difference between the USA and others is they went through a period where they had a large middle class.

    The real question is, how much can they blame (after all they voted Bush in)themselves and how much fox news for bumming down debate tot eh point where it is useless. I suspect that by creating the economic and media environment that produced Murdock, Australia has done more damage to the USA then even the continual wars that seem to cost and are never really won.

  7. @TerjeP

    It is obvious that in a modern democracy, everyone has an equal right to wealth. If the top 1% get much more than 1% then this indicates unfair exploitation. This is basic humanity.

    By misusing quotation marks – to pretend people are saying things that have not been said – you disqualify yourself.

    If you know how to use Google, and if you know that the ABS has household data, then you have no excuse for pursuing your protect-the-rich campaign given that you state:

    I don’t have the relevant data to inform on this point.

    According to economic justice – everyone gets the wealth they produce. According to social justice, wealth is transferred from some to look after others.

    You make no real point trying to dispute facts based on the difference between median and average. This is a denialist distraction. If the median is very different to average, then this implies that the distribution is highly skewed. So, if your distinction is marked – this is evidence for wealth and income inequality. So it seems you are arguing against yourself.

  8. Where the money is, is the issue at present. The short answer is that most of the ‘money’ is with those who don’t want to pay taxes and there is plenty of evidence to say that having been more ‘productive’ in the primary economic sense is not a justification for most if not all of them.

    The ‘money’ in question has been generated by private enterprise, losely referred to as Wall Street bankers. This type of ‘money’ production has generated a bifurcation point in the sense that there was an accute risk – in 2008 but building up from about 2 years earlier – the ‘world’ financial system would collapse (there were a few hours or even days when this was effectively the case except that the ‘world’ is not perfectly linked and various governments took quick action to counteract this catastrophic development). The US governments (more than 1 was involved) defended their currency by means of converting this privately generated dollar denominated financial mess into official dollar holdings (due to lack of an appropriate financial transactions recording system, the mess couldn’t be disentangled). It was the generation of a financial mess that made a some people very wealthy (and many of them converted their ‘foam dollars’ into physical assets). Those people are now called upon to pay up. Since they don’t do it voluntarily, taxation is a mean to achieve a binding commitment.

    The distinction between ‘economic’ and ‘social’ justice is not as sharp as presented by some. Private wealth is not necessarily the outcome of being ‘productve’; wealth transfers (expropriation of some economic agents by others) is possible too and it does happen, in the small and in the large.

    It seems to me the Tea Party people, like other fundamentalists, have a problem with the complexity of the contemporary real world. They want something simpler, something they can understand. Assuming I am not totally off the mark with my assumption about fundamentalists, perhaps an effort could be made to make the financial system simpler – so they can understand and others may benefit as well.

  9. @TerjeP
    Well you can call discussions of “the right to wealth” as communist in the extreme, but such discussions form the philosophical basis of the “right to tax.” I understand you may personally be against compulsory taxation, but that opinion is in the extreme minority. Of the vast majority of thinkers opposed to your view, very few are communists. Ike Eisenhower presided over a huge increase in the top marginal tax rate, and no-one could call him a communist.

    Whats more, even if it were a communist position, that shouldn’t be enough to render it obviously bad. Someone like you, who advocates policy positions far outside the Overton window, should not be so quick to dismiss other currently unfashionable views.

  10. har har hee,i’m cracking up.

    “a deep seated communist impulse”.

    ayy?whattt.blardy ell.

    turgids a seppo–i can tell.

    “deep seated communist impulse” waaah.

    i know–i’ma nong. but what else can one say.

    but it will be ignored for the moment?

    carry on.

  11. “If the top 1% get much more than 1% then this indicates unfair exploitation.”

    No, it doesn’t. You may be interested in the fact that, even if everyone had exactly the same income, same expenses, same savings, same super, same return on investments, we would still end up with massive differences in wealth because of accumulation over time and compound interest effects.

    Personally, I think it’s fine for the top 1% to have x% of total income, as long as they pay at least x% of total tax.

  12. @Jarrah

    I’d object on at least 2 grounds.

    1. Until such differences fully reasserted themselves, there would be equity. That could take quite a while, perhaps as long as one person’s working life.

    2. That could not occur in practice this side of the kind of radical reconfiguration of income and asset accumulation structures that would resist the kind of reversion you assert would occur. Such a thing could not drop de novo from the heavens.

    I’m not personally insistent that everyone have exactly the same income and assets. I think this improbable, impracticable amidst scarcity and probably less important, at least on timelines meaningful to us in 2011, than that everyone get what they need, regardless of the impact of the richest folk, and that we focus on making it possible for the burdens and benefits of productive work to be settled onto the shoulders of as many people as possible.

    That said, an income distribution in which the top 1% have more than the bottom 99% is clearly radically wrong, and likely to subvert equity in public policy.

  13. In a sense, the steps to the GFC of 2008 and to the current debt default face-off were all planned. I am not saying that the GFC was overtly planned nor that a debt default is overtly planned. I am saying that all the events that led to these things were planned.

    The under-taxation of the rich was planned.
    The relaxation of financial regulation was planned.
    The issuance of junk mortgage bonds was planned.
    The creation of CDOs was planned.
    The continuation of the tax strike by the rich is planned… and so on.

    It’s the same way that a drunken smash is planned. A person plans to drink heavily at a party they drive to. This person plans to still have their car keys in their pocket when all rationality is lost. Thus, the smash, while not overtly and consciously planned still has its planning implicit in all the ill-advised and quite planned steps leading up to the final event.

    It’s nice to know that the strategic financial management of our civilization shows about as much smarts as a lush on a bender.

  14. Saying the top 1% should have 1% of the wealth (or income) is pure communism. It basically assumes that nobody should have (or earn) more than anybody else. It isn’t a modest aspiration it is an ideologically mad aspiration. It says that the 70 year old who has worked a lifetime should have no more than a 17 year old who is just starting out. You’re totally crazy!

  15. it’s more like saying that the 70 year old can’t give the 17 year old a lifetime’s worth of wealth as an inheritance

  16. So unable to deal with a plain statement:

    If the top 1% get much more than 1% then this indicates unfair exploitation.

    some change it to:

    Saying the top 1% should have 1% of the wealth (or income)

    and then run their own agenda on top of their own innovation.

    Jarrah’s attempted fix, by taxing those with x% of wealth so they contribute x% of total tax is meaningless. If the exploiters have x% of wealth they should contribute (x+y)% of total tax.

    Of course if people have different saving behaviours different outcomes will result – but this is a different point. The wealth distribution being observed in the world today is that the 1% has vastly more wealth than the rest constructed by exploitation, and all these silly diversions are just trying to set-up smokescreens.

    You can always find fair and just reason for 1% to have more or less than another 1% but as I said, if this difference is much more than 1%, this indicates exploitation.

  17. I think you have a rather cockeyed notion of what “exploitation” is. It is entirely natural that some segments of society should have more accumualted wealth than other sections. The most obvious reason is age. However there are a multitude of other factors including effort, skill, innovation etc. Your year zero mentality is actually rather chilling.

  18. Terje 2/4

    What is your curiosity with the median income for the wealthy 1%, Terje? Are you curious as to what you can hope to gain when Libertarians take over the world?

  19. @TerjeP

    Please indicate where anyone has said:

    the 70 year old who has worked a lifetime should have no more than a 17 year old who is just starting out.

    Presumably a social strata of 1% of exploiters have a similar distribution of ages as the rest of society. You are jumping at shadows, without realising that you are the shadow.

    So if you want to make a rational point, then you should compare the exploiting 1% of 17 years olds (Paris Hilton) with 99% 17 year olds (for the same year) on junior rates.

    You should also compare 1% of 70 years olds (Howard Hughes) – the exploiters, with 99% 70 year olds (at the same date) who have sweated for 60 or 50 years on average wages.

    As Lachlan Murdoch moves from 17 year old to 70 year old he may continuously have much greater wealth than 99 normal workers as they move from 17 to 70.

    The age is not the determining factor.

  20. Prof JQ

    Now for something completely different, or maybe more of a different same.

    I have here in front of me a 26 page survey under the letterhead of Deakin University [and others] apparently compliled by a group named Datacol Research.
    It is titled “Water management and Desalination…A survey of your views and experiences”

    Interested?
    In the light of your recent post about the futility of water issues in this country maybe not.
    Then again maybe …
    Anyway if you want to know more [presuming you don’t already] then just ask.

  21. TerjeP is suggesting that Chris Warren has a “chilling year zero agenda”. CW is probably a bit further left than I am prepared to go. However, TerjeP has a real “chilling year zero agenda” all of his own. As far as I can read it, TerjeP is in favour of the abolition of effective democratic government. TerjeP wants taxes reduced so far (probably to nil going by some of his comments) that government, democratic representative government, would have to be abolished.

    Well TerjeP, you may get to see your experiment carried out in contemporary USA. At the current rate, democratic government in the USA (what’s left of it) is about to have huge slabs of its functions abolished by insolvency. This insolvency is a direct result of the tax strike by the wealthy. What escapes you is that the wealthy create none of the wealth they appropriate. Wealth is material product and material service. Material products and material services are produced by workers (manual workers and intellectual workers), that is by the people who actually do the work.

  22. Prof JQ

    I have here a 26 page survey from Deakin University compiled by a research company titled “Water Management and Desalination ….A survey of your views and attitudes”.

    Interested?

  23. If you’re looking for Federal government departments to be abolished, why put Education and NASA at the top of the list? Why not the DEA, Defence, or ICE?

    Better yet, why not abolish the whole Federal government?

  24. I take it that the essence of the original point is that in a massively unequal and economically stagnant society nothing can be done about an economic crisis except at the expense of the small number who have most of the money. If 1% of the population have 25% of the money, it looks on the face of it as if they’re the people the argument is pointing at. But on closer examination it is of course true that it’s possible that most of that 1% are not exceptionally rich. Maybe most of that 25% is concentrated in the hands of a smaller fraction, maybe 0.1% of the population, or maybe 0.01%, or maybe even 0.0001%. That observation isn’t a basis for rejecting the original suggestion that nothing can be done about the economic crisis except at the expense of the tiny minority of vastly disproportionately wealthy people.

    Maybe Terje has some other good argument against the idea that a resolution of the economic crisis is only possible at the expense of that tiny minority. But arguing about exactly which fraction of the population make up that minority is just a distraction.

  25. You’re grasping at straws there J-D. It is time that America gave up the idea that anyone should be a able to become a billionaire. There is a huge need here for some moderation in wealth creation, and a little more sharing around of the profits of performance, along with a shut down of profits made from trading in money and derivatives.

    The other thing that needs ot happen is the disconnection of the Chinese Yuen to the US dollar. The US dollar has collapsed because the US economy can no longer afford to pay at the same price as before. The US economy needs to get the trigger that the “free ride” on cheap labour is over , and get it self back into home production mode. The collapse of the dollar should be that trigger, but with the cost of Chinese imports remaining fairly constant the trigger is not working as it should. At least not for Chinese imports. In fact this tactic could very well be driving US imports from other source countries into the hands of Chinese business, another potential distortion of the world’s economy.

    You have to finally give socialist capitalism (or whatever we call the Chinese political system) the credit for whipping the pants off western democracy.

  26. Chris – if the richest 1% of the population has 1% of the wealth the no other 1% of the population can have more than 1% of the wealth (otherwise the first group would not be the richest). However nor can any other 1% of the population have less than 1% of the wealth otherwise they would leave too much wealth for the other 98% and somewhere the richest 1% wouldn’t be the richest. As such you are describing a world of pure wealth equality. Everybody has exactly as much wealth as everybody else. That is the logical mathematical implication of what you have said. And if you want a world with zero inequality then 17 year olds and 70 year olds have just as much wealth irrespective of skill or duration of effort. The only way I can see this working is if their is no private property at all or everybody is impoverished. So I’m belong literal when I call this position communist, not antagonistic.

  27. Iconoclast – as best I can tell Australia was a democracy in 1910 when the tax level was about where I think it should be. As for the USA they are more highly taxed overall than Australians so I can’t see how they are symbolic of the dangers of lower taxes. If anything they would be symbolic of the risk of higher taxes.

  28. Fran, those aren’t so much objections as non sequiturs. Your point about equity in public policy is more germane, but also, ironically, a restatement of the classic libertarian objection to greater government power – it is prone to exploitation by special interests.

    Chris, I’m puzzled that you describe my ideal of proportional equality as ‘meaningless’. It’s also funny, since you introduce the variable ‘y’ without defining it, and thus make your own statement literally meaningless. Lastly, you are confused again – I said ‘income’, not ‘wealth’. I can’t see anything fairer than the rich paying the same proportion of income tax as their share of income!

  29. “As for the USA they are more highly taxed overall than Australians”

    Would you like to elaborate on this, Terje?

  30. BilB – look up “tax freedom day” for the USA and for Australia. Americans hand over their income to the government for more days of the year than Australians. Not a lot more but more. To infer that the USA is representative of how miserable Australia would be if we lowered our tax burden defies the facts. Australia is already taxed at a lower rate than America and has been for a long time. If you want to see the misery of really low tax levels you would have to examine placed like Singapore or Hong Kong. And having visited both I’d say you would have a hard time finding much of it. Of course neither place is perfect but both are prosperous and the people their live well.

  31. @TerjeP

    As usual, TerjeP invents totally FALSE statistics to make his argument. OECD figures for taxes as a percentage of GDP are as follows as per Wikpedia;

    Mexico 17.5
    Chile 18.2
    USA 24.0
    Turkey 24.6
    KoreaSth 25.6
    Australia 27.1 (2008)
    Ireland 27.8
    Japan 28.1 (2008)
    Slovakia 29.3
    Greece 29.4
    Switzerlnd 30.3
    Spain 30.7
    New Zlnd 31.0
    Canada 31.1
    Israel 31.4
    UK 34.3
    Poland 34.3 (2008)
    Czech R 34.8
    OECD (unweighted average, 2008) 34.8
    Portugal 35.2
    Germany 37.0
    Luxembourg 37.5
    Slovenia 37.9
    Hungary 39.1
    Netherlands 39.1
    Norway 41.0
    Iceland 41.4
    France 41.9
    Austria 42.8
    Finland 43.1
    Belgium 43.2
    Italy 43.5
    Sweden 46.4
    Denmark 48.2

    QED

  32. Also, in 1910, Australia levied tax equal to about 5% of GDP. To look at a modern state which levies a similar rate we must see Angola with 5.7% or Afghanistan with 6.4%. These nations give you an idea of what a modern nation state looks like when it levies about 5% of GDP as tax.

    Singapore levies taxes about 14.2% and Hong Kong about 13%. Neither of these are comparable to true nation states. Hong Kong is not a nation state but a special economic province of China enjoying all sorts of atypical advantages. The revenue of Singapore would include (I have not checked this in detail) atypical receipts from its location as a transport hub and service hub. A similar effect would be obtained if you looked at just London’s or Sydney’s revenues adjusting out the dragging down effect of regional backwaters and also adjusting out certain national costs such as defence.

    As usual, TerjeP both makes up his own statistics and compares apples to oranges in the most untenable way.

  33. Okay I took a closer look. My figures are dated. It seems that over the last few years tax freedom day has come earlier in the USA and also it now comes later in Australia. So touché.

  34. I found the answer to my question. According to the following article in order to make it into the top 0.5% by income you need to earn $277000pa. This tells us the median income for the top 1% of US income earners. So the group that earns 25% of the income are typically on the salary of a senior company executive.

    http://blogs.wsj.com/wealth/2007/02/01/the-rich-o-meter/

  35. Chris, I’m puzzled that you describe my ideal of proportional equality as ‘meaningless’. It’s also funny, since you introduce the variable ‘y’ without defining it, and thus make your own statement literally meaningless.

    Geez Jarrah, if you want to know the definition of y, then just go back and ask the fellow who introduced x.

    Hang on, that fellow is Jarrah. So why ask me for the definition, ask Jarrah. Whatever x is, y is the same.

    So if you want to dispute some issue of definition start with the x.

    Jarrah’s little tax scheme is not a scheme of “proportional equality”. This is a cosmetic label for propaganda purposes. You only get meaningful equality with a progressive tax scale.

  36. Let me first state my reading of TerjeP’s argument:

    It’s unfair to tax heavily those on the 1% top bracket, whose average yearly income is $12.5 million, because their median yearly income is surely much lower: if they all were equally taxed, the really rich people (at the right end of the income SCALE) would be paying the same taxes as the not-so-really-rich people (at the left end of this income BRACKET)

    From here my comments:

    All income distributions (empirical or theoretical) have the same properties: medians are always smaller than averages at least along its right tail.

    So, if instead of taxing heavily the top 1% income tax bracket, we chose to tax heavily, say, the richest 0.1%, we’ll find… that oh, no! it’s unfair to tax these people heavily: after all, their median is also… much smaller than their average!

    Whaddaya know!

    It’s quite funny and creative, too, when you think of it.

  37. Magpie – I didn’t make the argument you think I made. What I did was ask a question. And my hunch about the answer was not merely that the median would be lower than the average (yes that’s trivial) my hunch was that it would be “vastly” lower.

  38. Chris Warren :@TerjeP
    #29 is an impenetrable jumble of nouns and verbs that makes no sense.

    It was pretty clear. However I will try again using an analogy.

    Axiom 1. We have 100 litres of water (wealth).
    Axiom 2. It is spread somehow across 100 buckets.
    Axiom 3. We have a bucket containing 1 litre of water and no other bucket is more full. We call this the richest bucket.

    How much in the other 99 buckets?

    Given those axioms my contention is that all buckets must be perfectly equal (ie you’re a communist). It isn’t hard to prove it logically.

    For all 99 buckets we know via axiom 3 that their volume is less than or equal to one litre. Otherwise they wouldn’t be one of the 99 but rather they would be the fullest (richest) bucket.

    However if any bucket has less than one litre then we have more than 98 litres split across the remaing 98 buckets. That would mean their average is more than 1 litre per bucket. Therefore one of them must have more than 1 litre. However this violates axiom 3.

    Therefore no bucket can have less than 1 litre.

    As none can have more than 1 litre and none can have less than 1 litre all buckets must have an exactly equal quantity of water.

    Conclusion: You are advocating communism.

  39. For goodness sake, Terje. If the average holding for the top 1% isof households is $12.5 million, and they are hopeless investors and earn only 5% on their property, then their passive income will be $625,000. That is before they step out of the house in the morning. Perhaps your figure represents the “taxable” income for this misunderstood group of people. And their “taxable” income is very much the issue.

  40. “Whatever x is, y is the same. So if you want to dispute some issue of definition start with the x.”

    Oh dear. Is basic algebra beyond you as well? x is whatever we want it to be, the actual number doesn’t matter. What I’m saying matters is the relationship between income and tax, and as long as the ratio is about 1:1, we’re good to go. That is a textbook example of proportional equality. In the US they get pretty close, but the richer do pay more – the top quintile earns 59.1% of total income, but pays 64.3% of total tax (including local and state). The bottom quintile earn 3.5%, pay 1.9%.

    “If the exploiters have x% of wealth they should contribute (x+y)% of total tax.”

    Since you bizarrely introduced another variable, which is “the same” as the first variable (x=y), you want someone with proportion x of total income (assuming you just made a mistake when you changed my formula about income to wealth) to pay twice that proportion (x+x) of total income tax. Why is that “meaningful equality”?

    And you still haven’t acknowledged the fact that some people having greater wealth than others does not necessarily mean they are ‘exploiters’.

  41. @Jarrah

    Just to state the obvious. If the definition of two variables are the same DOES NOT mean that the quantities represented by the variables are equal. Only Jarrah thinks this.

    Jarrah has not been digesting what has been said. No one has said that some people having greater wealth than others means they are exploiters. This is a denialist’s deliberate misrepresentation.

    Go back and read what was stated. Then get back with a logical argument.

    Jarrah obviously has read no classical political economy and has no understanding of the analysis of this precise issue found in the Writings of Karl Marx and Frederick Engels.

    Jarrah has the same qualificatioin in these issues as monkeys trying to recreate the works of Shakespeare.

  42. @TerjeP

    This is a fantasy. In real life the rich have bigger buckets than the poor. They fill them by expropriating wealth from others.

    You missed this from your so-called axioms.

  43. “No one has said that some people having greater wealth than others means they are exploiters.”

    That is precisely what you have said:

    If the top 1% get much more than 1% then this indicates unfair exploitation…the 1% has vastly more wealth than the rest constructed by exploitation…Presumably a social strata of 1% of exploiters…you should compare the exploiting 1% of 17 years olds…You should also compare 1% of 70 years olds (Howard Hughes) – the exploiters…

    You seem to have descended to mere insult, rather than dealing with the substantive issues, but in keeping with this site’s rules, I won’t respond in kind. I can let the record stand for itself – it’s obvious to all that you don’t know what you’re talking about.

  44. Terje @ 33,

    As you are the party interested in the comparison of US taxation to Australian, hows about doing a summary of US taxation for us from your perspective.

    I heard the figure this morning that at present the US tax take is only 2/3rds of outgoings, So they have a massive problem and I think that marginal adjustments are not a real answer. The bottom 2/3rds of the population have no savings and exist on minimal wages from 3 jobs, so it looks like the top one third are going to have to get a second job and get part time work for the wife to pay new higher taxes. That would be fair.

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