We live in a time of “conspicuous consumption”, a phrase Thorstein Veblen coined at the turn of the twentieth century. It’s largely made possible by the Bush tax cuts – much capital has been freed up and has no useful purpose, and so is put out to pasture. It’s an odd phenomenon, not unique to that time period, to wit:
I usually imagine people that drive Hummers as either repressed homosexuals or straight dudes with inadequate equipment. Compensation is definitely the underlying theme. But here’s where it helps to have lived as long as I have. I remember that nothing really changes, people are always the same. To wit:
Bottom line: For all their talk of investment and fantasies about “job creation”, having a lot of money is really about leisure time and expensive toys. Typically, the clerk at Burger King and the Mexican gardener are working harder and are more important to our economic well-being than any WalMart heir or trust baby. If millionaires were to go on strike, John Galt be damned, very few of us would notice outside the country club. But if the sanitation workers go out, or the police, or the retail clerks, we would quickly disintegrate into chaos.
That’s why we should not be too uppity when we see this:
It’s probably driven by a guy who makes our days run a whole lot smoother, someone whom we depend on and rarely acknowledge, except to sneer at and say “Get a job”.
Piece of Mindful 
When the millionaires go on strike they go overseas to tax havens (or heaven), and believe me, that gets noticed.
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Hasn’t so far. Last year and this the government will collect more revenue from the payroll tax than the income tax. That’s where the money is.
Anyway, it comes down to your not understanding the basic mechanics of wealth creation. It’s not the millionaires who make us go – they merely harvest wealth, by and large. It’s the average working Joe.
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So I take it that every extra dollar earned by a millionaire is a dollar taken from the “workers”.
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The working Joe makes the product, but not without the wealthy guy’s business and/or capital making his job even possible. We need BOTH! You can romanticize the working stiff (and I am one) while denigrating those who stake the capital and open the business if you like. I find that to be a narrow view of the picture.
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No Swede – it is, as Rocky said, that we don’t lionize the millionaire. Tell me what wealth the Walton heirs have created?
Rocky is right – ti does take both. Right now working people are burdened with two taxes, paying two or three times the rate of tax that wealthy investors pay. That, Swede, is what your attitude engenders.
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I think that the class warfare game you play would work back in the seventies when less than 20% of Americans owned stocks, 401K’s, and other retirement or investment accounts. But now over 50% of all Americans own these investments, earning the same 2 to 3 times less tax rates as the “workers”.
Accounting for illegals, prisoners, deadbeats, your investment challenged souls who you mourn for couldn’t possibly rate 20% of the general population.
Wal Mart employees who participate in the co.’s stock plan create wealth just like the Walton heirs.
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You’re playing a numbers game here – as of 2001, the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 51%, which means that just 20% of the people owned a remarkable 84%, leaving only 16% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth, the top 1% of households had an even greater share: 39.7%.
A statistic like percentage of households owning stock is virtually useless and used to obfuscate, rather than enlighten.
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So Mark please tell me, is the small invester not ripping us off with low dividend taxes and 401K’s, but the large investor the evil one?
When Sam Walto died he owned 38% of Walmart, the rest was owned by his employees and outside investors, many of which had Walmart in their retirement folders. If you demonize Sam you must demonize all investors large or small.
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“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration.” (A Lincoln).
I am saying, and I’ll be clear once more, that labor should not be taxed twice at punitive rates, while investment is taxed once, and lightly at that. We once had a system wherein “passive” income, or investments, was taxed at a high bracket of 70% on the assumption that it was earned without sweat of brow. They had it right then, and there was no shortage of investment capital. Since that time we have turned it all on its head and make it out to be that investment is somehow, by osmosis, a wealth-producing activity. It’s a wealth collecting activity, and deserves less consideration than labor.
Can I speak more clearly?
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Where I have difficulities with your definations of labor vs. capital is in this venue. Lets say we have plumber Joe and plumber Sam. Both laborers work hard, pay taxes, own homes and raise families. Plumber Joe likes to go to the bar after work, have a few beers and play the poker machines, which uses up all his disposable income and any hopes for a retirement income other than SS. Sam, on the other hand, goes home every night and saves his money in tax deferred 401K’s for him and his wife.
Tell me if I’m wrong, but it seems to me you’d want Sam’s investments taxed at the 70% rate. Sam, who for 35 years was up to his armpits in toilets, who saved so he wouldn’t be a burden on his kids or the gov., to hand over almost 3/4 of what he saved is lunacy and fortunately will never happen.
You can keep dreaming Mark, better yet work to decrease taxes on your so called labor end.
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That is some kind of distorted reasoning! I think what you’re saying is that plumbers shouldn’t drink. Social Security is tax free, or oughtta be. Savings in IRA’s and 401K’s are tax at 14.2% (payroll tax) before they are invested, and then taxed again when withdrawn (income tax). Since I believe in progressive taxation, the higher rates would not apply until the return was very very high – in the hundreds of thousands. Ain’t no plumber gonna make that kind of retirement.
As to the higher rate of tax paid by passive income – Jimmy Carter did away with the 70% bracket, and I think it’s kind of high, though passive income ought to pay at least what is paid on wages. That would be 40-50% on nominal middle class earnings. Fair is fair.
Here’s the deal, here’s how it works: A guy who makes his living off of stocks and bonds – trust babies and wealthy investors – pays tax at as low as one-third the rate of people who work for a living. The reason: Investors are organized politically, and great favors are done for them.
The reason that Joe the plumber gets stiffed: One, he’s not allowed to join a union, two, he has to pay two taxes. Typically, if he’s having any success at all, if he is scraping the lower rungs of the middle class, he will be paying 40-50% of his income in tax, while the investor is paying 15-20%.
That’s what your defending. You should be ashamed that you are using working stiffs as a foil, pretending that the system is designed to benefit them when it is designed to screw them.
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