Should US wealth be redistributed?

[VJW]

Re: Should US wealth be redistributed?

I know VJW doesn't really like to listen to examples from across the pond but Britain is a highly taxed country similar to that advocated by him...

I’ve never advocated a “highly taxed country”. I’ve advocated that the woefully undertaxed wealthy and corporate pay their fair share of the tax burden. I’ve advocated that taxes be lowered on the Middle-class and Working Poor.

A COMPLETELY DIFFERENT ARGUMENT.

America has had much higher taxation on the wealthy and corporate twice in the 20th Century, from 1993 through 2000, and in the late 1950s/early 1960s. They were the greatest period of economic prosperity ever in our nation’s history, and the second greatest period of economic prosperity ever in our nation’s history, respectfully.

Think very seriously before you follow our path.

I’ve never advocated to “follow” your “path”. Do try and pay attention.

Your ‘Straw Man’ argument is quite transparent.

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[Bruce Wayne]

Re: Should US wealth be redistributed?

Conversely in the 1970's the upper tax level was 50%, with corporation tax set at 52% and a base tax level of 32% and it coincided with mass unemployment and the infamous 'winter of discontent'. This event was triggered partly because the Labour government of the time wanted to control the rate at which pay could rise, resulting in mass strikes throughout the nation.

This period assisted the Conservative party of Margaret Thather in entering government, which coincided with Britains period of economic growth as things like share ownership and home ownership rose throughout the 80's.

[dealsaver]

Re: Should US wealth be redistributed?

I can't believe this is an actual topic. No wait, I guess I can. People with a looter's mentality have always been with us and always will be. They either want what you have or they want to give away what you have to others who they feel are more deserving. Beware the looters.

[cercis]

Re: Should US wealth be redistributed?

Or maybe they look around and see that some people have an entitlement mentality and have figured out how to get paid more than 450x the average salary of "normal" people and justify it based on "that's what other people get paid".

They've figured out how to get the "help" they need from employees for minimum wage (because people have to have a job and if all they can get is minimum wage or $8/hr, they'll take it and be grateful, other people have nothing). Thereby ensuring that there are people who are hungry and have no medical care. Ensuring that their kids will be malnutritioned and unable to get the things they need to progress further (which doesn't mean some don't, it just means that they have to be a special person).

It has been proven that kids who do not get good nutrition have lower IQs. Why? Because their brains didn't develop to their full potential. How important is IQ? It depends. If your genetic potential is 140 and you don't get there but instead get to 130, it isn't so important. If you genetic potential is 100 and you only get to 90, it's darned important.

Children with parents who are middle-middle class and up generally get the nutrition they need and reach their full genetic potential. They may not live the american dream of doing better than their parents, but they probably won't sink into poverty. Kids who have parents who are lower-middle class and below are less likely to get the nutrition they need and are more likely to sink into poverty and less likely to be able to rise above it. They, quite frankly, do not develop the intelligence they could have (and like I said, some do end up with higher than average IQs, but it wasn't their genetic potential).

There are those of us who feel that we live in a country who used to believe you took care of each other. We believe that no one should be malnutritioned. And we believe that if you are benefitting very heavily in a company where you control the wages of those below you, you should either ensure they have a living wage or be prepared to pay taxes to provide for their minimal needs.

It is unconscionable that we have CEOs making millions of dollars while their employees are struggling just to eat. The CEO and board members of the company I worked for actually got 7 figure bonuses when they laid us all off. They took away our jobs (because the company couldn't afford it) and then got bonuses that would have paid all of our salaries for several years. It didn't mind so much for myself, DH was a SAHD and was able to find a job at roughly the same salary, most of my co-workers weren't so lucky. We were a somewhat specialized field and there just weren't that many jobs in our field in our town. They couldn't just up and move, their spouses had jobs they couldn't leave. They ended up sinking into major debt while they struggled to find any job - not even walmart of mcdonalds would hire them (they won't unless you lie about your education and experience, if you're too educated or experienced they don't want to hire you because you'll clearly leave as soon as you find a job in your field).

I happen to think that if you are laying people off, then you should be prepared to give up your bonus and even forego a raise (or maybe even take a cut in pay). Not start by taking away jobs.

And if you're not prepared to do that, oh well, pay enough in taxes so that they can at least have health insurance and food. No one NEEDS 7 figure salaries. I'd go so far as to say, no one is worth a 7 figure salary.

[VJW]

Re: Should US wealth be redistributed?

There was actually a news story a while ago about a bunch of CEOs complaining that their employees aren’t as loyal to their companies as they used to be.

DUH.

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[VJW]

Re: Should US wealth be redistributed?

Conversely in the 1970's the upper tax level was 50%, with corporation tax set at 52% and a base tax level of 32% and it coincided with mass unemployment and the infamous 'winter of discontent'. This event was triggered partly because the Labour government of the time wanted to control the rate at which pay could rise, resulting in mass strikes throughout the nation.

This period assisted the Conservative party of Margaret Thather in entering government, which coincided with Britains period of economic growth as things like share ownership and home ownership rose throughout the 80's.

Further evidence that attempting to draw conclusions by comparing completely different situations is silly.

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[Bruce Wayne]

Re: Should US wealth be redistributed?

Further evidence that attempting to draw conclusions by comparing completely different situations is silly.

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You wanted to tax the wealthy more and I showed you an example of when this happened in Britain, a country very similar to America. How is that a different situation?

As for the ceo's earning too much thing I'd like to add a couple of points.

Firstly, running a large company isn't an easy thing to do so ceo's deserve a good wage (plus of course the company wants the best ceo so has to compete in the marketplace for ceo's and pay competitive salaries etc.). Of course the same labour market works further down the chain too, so if you have skills that are in demand you will be paid very well. If you have skills that are not in demand (relative to supply) then you won't get paid so well.

Secondly life isn't fair. Ceo's got where they are partly through skill, partly through luck, partly through connections etc. and they, along with other people like pro athletes, are paid large sums for doing what they do. Life will never be fair because human beings simply aren't designed that way. A person working in government is no more likely to be fair and just than a person working for a corporation. The difference is that choice is more readily available with corporations.

The point I'm trying to make is that sometimes life sucks, sometimes you don't get what you deserve, but instead of complaining or expecting other people to run your life for you, you have to get on and do it yourself. It's your life, no one elses and you shouldn't feel as though you are owed a life by anyone else.

The price of food is a poor excuse for failure as it is cheaper than almost any time in the past and more readily available. Of course it could be much cheaper if governments stopped subsidising their farmers and allowed competition from third world countries, but then many farmers would complain about the loss of livelyhood etc., just as many other companies and industries do when the threat of less favourable trade terms are mentioned.

[VJW]

Re: Should US wealth be redistributed?

You wanted to tax the wealthy more and I showed you an example of when this happened in Britain, a country very similar to America. How is that a different situation?

The differences are numerous.

* In the 1990s, the top tax rate was increased from 33% to 39.6%

* The top tax rate in America only applies to the top 1.2% of taxpayers, whereas the top tax rate in Britain applies to a much broader swath of the populous.

* The Corporate Tax rate was increased from 30% to 35%, far lower than in Britain. Not to mention that the vast majority of Corporate America pays little or no income taxes.


* Britain’s entire tax system is overall a lot more regressive, because of the VAT.

The differences continue.

As for the ceo's earning too much thing I'd like to add a couple of points.

Firstly, running a large company isn't an easy thing to do so ceo's deserve a good wage (plus of course the company wants the best ceo so has to compete in the marketplace for ceo's and pay competitive salaries etc.).

If they are concerned with “competitive salaries” for CEOs, then why do American companies pay CEOs TWENTY to FIFTY times what their competitors pay CEOs in Japan and Europe ?

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[Bruce Wayne]

Re: Should US wealth be redistributed?

I doubt US ceo's are paid quite that much more than European ceo's as it wouldn't be competitive. Many leading ceo's in Britain are paid £10m per year + so by your reasoning an American ceo would be earning £500m+. Sorry, but I simply cannot believe that at all.

[jmjj215]

Re: Should US wealth be redistributed?

We're back on executive compensation again. Didn't we already discuss this?

[cercis]

Re: Should US wealth be redistributed?

Jesse, what is your point?

Executive compensation is a big deal. There is a sense of entitlement for upper level management. They feel that they someone how are entitled to high 6 figure - low 7 figure salaries whereas their employees are just whiners when they haven't had a raise in the last 3 years and are seeing health insurance premiums creep up. I've heard bosses say that it doesn't matter if their salaried employees qualify for WIC and other government programs, that's what the gov't is there for, while simultaneously complaining about "wealth redistribution through taxation". You pay one way or another.

[VJW]

Re: Should US wealth be redistributed?

I doubt US ceo's are paid quite that much more than European ceo's as it wouldn't be competitive.

There’s your primary problem. When reality comes in conflict with your beliefs, you assume it is reality that MUST be wrong.



“In England, where pay is closest to U.S. levels, the total take including stock-option gains realized by the highest-paid 500 CEOs in 1997 was still less than the $565 million in options that Walt Disney Co. chief Michael Eisner alone exercised on Dec. 3 of that year, according to a study by Martin Conyon, an assistant professor of management at the University of Pennsylvania's Wharton School, and Kevin Murphy, a professor of finance and business economics at the University of Southern California's Marshall School.”

“Japanese CEOs come out looking like paupers compared to their American counterparts. Pay for the big cheese at a Japanese firm ranges from $300,000 to $500,000 on average, says Hay Group's Tanaka, with bonuses averaging a measly 10%. In the U.S., by comparison, bonuses often eclipse base salary. And Japanese CEOs trail those in the U.S. by one other measure: Typically, they earn only about 10 times more than a manufacturing employee, according to a 2000 Towers Perrin survey that looked at industrial companies with about $500 million in annual sales (see table). In the U.S., where the multiple is the highest in the world by far, CEOs of 365 top companies raked in 531 times more in 2000 than the average hourly worker did.”

BUSINESS WEEK

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[jmjj215]

Re: Should US wealth be redistributed?

Jesse, what is your point?

Executive compensation is a big deal. There is a sense of entitlement for upper level management. They feel that they someone how are entitled to high 6 figure - low 7 figure salaries whereas their employees are just whiners when they haven't had a raise in the last 3 years and are seeing health insurance premiums creep up. I've heard bosses say that it doesn't matter if their salaried employees qualify for WIC and other government programs, that's what the gov't is there for, while simultaneously complaining about "wealth redistribution through taxation". You pay one way or another.

My point is that we already recently talked about this. That's it.

[cercis]

Re: Should US wealth be redistributed?

Okay, sorry, I was feeling snarky.

The thing is, when this kind of discussion comes up, CEO compensation is going to come up because it is one of the most flagrant examples of current wealth redistribution (the other would be actors and sports "heroes").

It's especially bothersome because we feel helpless to do anything about it. All we can do is sell our stock and only buy stock in companies that have the right idea in regard to pay structure.

[jmjj215]

Re: Should US wealth be redistributed?

and only buy stock in companies that have the right idea in regard to pay structure.

which might be a comparably worse investment. For example, I think Steve Jobs is one of the highest compensated executives in the US - and look at the stock price since he took the helm.

5 year AAPL chart

Thought he actually took the helm in '97, I couldn't get a chart for that. No matter - still a mighty fine investment.