Let’s Talk Taxes

Are they too low? Too high? Just right?

Some folks, mostly of Republican stripe, cry loud and long, complaining that personal and corporate income tax rates, and other forms of taxes, are TOO HIGH, even excessive. Yet in the mean time, many folks, aka The Common Man, feel more than just a little pinched, and stressed out not just by inflation which has affected everything from groceries to housing, but by the cost of everything in general… even before inflation took its toll.

And, at the end of the day, for many, particularly our most vulnerable — the elderly, children, the impoverished, veterans, the homeless, those without healthcare insurance, etc. — there are more bills than there is money.

Kitchen table economics are real.

And though our nation sorely needed it, very few — exactly 19 Senators, and 2 Representatives — voted FOR the Infrastructure Investment and Jobs Act (H.R.3684). Maybe

Let’s Talk Taxes!

We have a crazy economy, for sure.

And, it seems to be working best, and most, for the über-wealthy, the out-of-touch-with-reality “multi-billionaire class” type folks, and their corporations. You know… the ones who pay little-to-no income taxes upon their vast wealth.

Those are the ones who have no idea what a gallon of milk costs, what diapers cost, what childcare costs, and who, instead of going to Disneyland, Dollywood, or down the road for vacation, dish out million$ from their morbid exce$$ to fly to outer $pace ju$t for fun, or buy boats so big that they won’t fit under a bridge on an inland waterway where they’re built so they get the government to temporarily dismantle the historical landmark just to sail through it, etc.

We’re talking about folks like Jeff Bezos and his Amazon Corporation, Elon Musk and his Tesla/SpaceX corporations, the so-called “Oracle of Omaha” CEO of holding company Berkshire Hathaway, Inc. Warren Buffett, Microsoft founder Bill Gates, Facebook founder Mark Zuckerberg, Google co-founders Larry Page & Sergey Brin, Oracle co-founder Larry Ellison, former Microsoft CEO Steve Ballmer, and Bloomberg founder/owner Michael Bloomberg, all who round out the Top 10 Wealthiest People in America.

These are men who are individually, each worth more than the entire GDP of Iraq — U.S.$201,472,000,000 — and 163 other nations in the world.

And combined, they’re worth U.S.$1,346,600,000,000 — between the GDPs of Spain (U.S.$1,439,958,000,000) & Mexico (U.S.$1,285,518,000,000), ranked 14th & 15th, respectively, internationally, of 216 nations.

According to Forbes, their wealth is practically unimaginable, which “membership” in the Top 400 grouping now requires a minimum net worth of $2.9 billion, up $800 million from a year ago.

As well, the vast majority of them are greedy, also according to Forbes, which wrote,

“The 400 wealthiest Americans saw their collective fortune increase 40% over the last year,
to $4.5 trillion.

What hasn’t increased?

Their generosity.

The number of Forbes 400 members who gave away more than 20% of their net worth since last year’s list,
dropped from 10 to 8,
while those who gave away less than 1% of their wealth went from 127 to 156.”

Imagine that, eh?

I got mine, good luck getting yours.

They’re probably cheapskate tippers, as well. Not at all like the anonymous folks who leave a $1000 tip for a $25 meal, or skinflints who chisel the pizza delivery driver.

What an attitude, eh?

But, let’s talk about income taxes, which are not paid by such folks, who craftily, and legally — yes, legally — hide their money from the tax man through various mechanisms, some of which frankly, are abusive, such as

How did we ever get into the mess we’re now in?

Democratic Presidential nominee candidates Senators Bernie Sanders (VT) and Elizabeth Warren (MA) continue to make the case that corporate America has harmed, and continues harming, the very field upon which they sow the seeds of their profit.

They further make the case that such governmentally-approved behavior is not merely injurious, but is unsustainable – if not fatal – to those same corporations, and ultimately, to the American economy upon which it feeds.

Citing examples of such greed and rapacious corporate profiteering by their über-wealthy owners and Wall Street overlords (to whom they are fiscally accountable and must share profits), and in conjunction with misguided Federal tax policy (led almost in whole part by Republicans), Senators Warren and Sanders show how overseas and foreign “outsourcing” – all in the name of increased corporate profits – have damaged average American families, including the cities, towns, and states wherein they reside, whom have all witnessed and suffered from wholesale corporate abandonment to foreign soil.

Slow learners are discovering that America’s narsicisstic wealthy “businessman” president – whom they elected, hoping he would be their knight in shining armor coming to their economic rescue – has also sold them out for his own self interests, exactly like his party’s predecessors. They were merely expendable pawns whom he deceived in his egocentric reality show/chess game. They’re merely the red-capped collateral damage in his monkey-business trade war.

Nowhere are the result of such policies more
plainly and painfully evident than in middle America,
where once-thriving factories have become hollowed-out shells
–
the veritable rotting skeletal corporate detritus which has
fostered and driven
the Opioid Epidemic in many states.

Once-renown industrial cities like Detroit, where the Big Three of the automobile industry – Ford, Chrysler, and General Motors – reigned since the early 1900’s, and supplied high-paying Labor Union wages with genuine, and significant healthcare and retirement benefits to generations of families. Children attended well-funded public schools, states and cities prospered, thrived and expanded exponentially. Teens who chose to attend college or university did so without incurring debt, and training for technically-skilled jobs and labor was supported by almost all secondary schools.

Then, as if seemingly unnoticed, small things began to change. It was if America’s hard-working men and women, and middle-class families had become the proverbial frogs in a pot of water, never noticing the water temperature was increasing, until they were boiled to death… while yet alive.

Life-saving medications like insulin for diabetics, antibiotics to treat and cure once-deadly infections, blood pressure medications which reduced strokes and many other hypertension-associated health problems, even the plastic bags which contained Normal Saline – typically given as adjunctive intravenous therapy in hospitals – began to be manufactured overseas, and along with it, came precipitous price hikes. So-called “pharma bros” took shockingly unjust and unimaginably avaricious pecuniary advantage of old-line medications – which had for years been off-patent – and jacked up their prices 5000%, or more, which placed them out of reach for many whose very lives depended upon them.

The giant, sloppy, wet kiss given to the Pharmaceutical Industry by Republicans under President George W. Bush in Medicare Part D didn’t help. Pharmaceutical companies were allowed to, and did, raise their prices, and Medicare – the single largest purchaser of medications in the world – was forbidden from negotiating for better, lower prices by that same law, which in turn, passed the price increases along to the insured, most of whom live on nominal, and fixed incomes.

Exorbitant pharmaceuticals hold patients hostage to disease,
as hapless physicians and feckless regulators are
paralyzed to become
Wall Street extortionists’ socioeconomic ransom.

The Supreme Court’s 2010 ruling in “Citizens United v. Federal Election Commission” which solidified corporate personhood, and essentially said that “money is free speech” has neither helped. For if money was free speech, then the poor man would have none (thus violating the Constitution’s Equal Protection clause of the 14th Amendment, and the First Amendment which guarantees Freedom of Speech), and our laws were, and are, written for all equally.

Neither has the subsequent 2014 Alabama case McCutcheon v. Federal Election Commission which “struck down

Size Matters: Neither The Congress Nor The Supreme Court Are Big Enough

Should we, as reasonable people, expect the size of our Congress – specifically, the House of Representatives – to be permanently fixed at 435 members, and never increase representation according to an increase in population? And with regard to the the Supreme Court, should only 5 people decide the fate of a nation, why not a few more, like 13 or 17?

What if I told you Congress needed about 1000 MORE Members of the House of Representatives? And, what if I told you the United States Supreme Court needs to have AT LEAST 13 Justices, and that THEY should choose from AMONG THEMSELVES the Chief Justice?

You don’t wear the same size clothing you did when you were aged 10, 15, or even 25. The People’s representation in our nation’s governance needs also needs to be properly fitted.

Having MORE Representatives would NOT cause “more logjam politics,” nor would it cause corruption, but instead, would significantly increase efficiency -and- the ease with which laws would get passed, and bad or old laws get eliminated or changed. Criminality is most often done in secret by a few. Rarely is criminal activity, even in organized crime, ever on a large scale like an army invasion. It’s always a little thing, like guerilla warfare. There were only 7 co-conspirators with President Richard M. Nixon in the criminal Watergate break-in, burglary, wiretapping, attempted cover-up, and resulting scandal. The pace at which our government moves is not merely unresponsively sluggish, it is deliberately and negligently slothful. It is being reasonably asked to do things we tell it to do, and in the process, being denied the resources – money, personnel, and time – necessary to perform those tasks. Government can, and should move much more quickly. And historically, it has.

Think of it this way:
You have three dogs, and one chicken bone. Throw it down and watch them fight.
You get two more chicken bones, and each dog has one. Problem solved.

Some would raise the matter of Constitutional interpretation in opposition to the idea, and think we should hold to a strict Constitutional interpretation – whatever “strict” is, or means – and it typically means that the modern thinkers imagine they can, and therefore attempt to conjure up a mind-reading session to interpret what the framers of the Constitution intended or hoped… even though they’ve been long dead. Sure, they gave us the Constitution, along with a means and method of updating it, which itself means that it’s not static, and can be changed. And it has been changed many times since its inception. It is a living document, not a dead one into which we attempt to blow the breath of life. It lives still.

Some think we can interpret the Constitution according to our unique needs, which the original framers could not have begun to fathom. And the fact is, that’s what we’ve always done. At least until the last 50 years, or so, until the time which gradually, the specious notion that smaller is better crept in under cover of negligence, and “downsizing” became part of the popular corporate and political vernacular. In effect, such talk is discussion is only about inefficiency, and how they have not effectively used the resources they have, nor planned appropriately.

There is no doubt that the framers of our Constitution could never have imagined that man would walk on the moon, that geosynchronous orbiting and interplanetary traveling satellites would tell us about our precise location on Earth, and our solar system, and that more than twice the computing power of history’s largest space rocket (Apollo V) could fit in your shirt pocket, or that our union would have well over 330,000,000 residents.

Button Gwinnett (1735–1777 was the first signer of the Constitution, and was later, briefly the Governor of Georgia.

And it goes without saying that Button Gwinnett, Samuel Adams, John Hancock, James Madison, George Washington, and others in their era, had no idea about antibiotics; they had no inkling that magnetic fields could peer deeply inside the human body to detect disorder; that dental implants and multi-organ transplants would exist; or that we would send a telescope to orbit our planet and peer deeply into the cosmos to see star systems hundreds of billions of light-years away -and- then replace it with an even better, significantly improved, more perfect one to see into the edges of the time -and- send a satellite hurtling toward the sun to learn more about the blazing fiery hydrogen fusion orb which is the center of our universe.

Artist’s 2009 rendering of the James Webb Space Telescope, which will replace the Hubble Space Telescope.

None of those things and more which we daily take for granted – such as GPS on smartphones – could have ever been imagined by our Founding Fathers… or their mothers, or children, and never were.

We are as different, and our needs are as immensely diverse from our nation’s founders as night is from day, and there is no reason why we should not “update” our government according to the manner for which it is prescribed.

In 2019, we have more patents, more copyrights, more inventions, more discoveries, more science, more creative works of myriad kind, and – of course – many, many, many, more people. Many!

If it was anything, it was but a pipe dream that one day, unmanned remote control aircraft could be silently flown around the world, eavesdrop on conversations, take pictures in the dark to deploy guided missiles, drop bombs, and kill people… and that we, on the opposite side of the globe, could watch it unfold live, as it happened, as if it were macabre modern gladiatorial entertainment.

Portrait of Robert Boyle (1627-1691), by German painter John Kerseboom (d.1708), which is publicly displayed at Gawthorpe Hall, in England.

In the age and era of the founding of our nation, the concept of microscopy and the cell theory was relatively new. Robert Hooke, considered the “father of microscopy” had just discovered cells in 1665, and Robert Boyle (Boyle’s Law) were contemporaries in 1662, while Sir Isaac Newton died in 1727 – a mere 60 years before our Constitution was written.

Benjamin Franklin didn’t publish his most famous experiment which used lightning and a kite to prove that lightning was electricity until 1750; Orville and Wilbur Wright didn’t get off the ground at Kitty Hawk until 1903; Alexander Fleming discovered the first antibiotic – penicillin – in 1928; and the planet Pluto wasn’t discovered until 1930!

We’re talking about 242 years ago, “when giants and dinosaurs roamed the Earth.”

In a way, our nation’s founders were giants, and yet, in another way, they were dinosaurs who could fathom no idea – not even a minuscule hint – and because of it, were literally clueless about the greatness that America would become.

To give them their due, however, their curiosity and liberality served them well then, and it serves us well now. Our form of government is, in the history of humanity, among the shortest-lived, but the most remarkable, and successful.

Congressional Coffee Hour (Senate). 2 May 1961, Blue Room, White House, Washington, D.C.; L-R: Senator Quentin Northrup Burdick-D, North Dakota (1908-1992); Senator Wayne Lyman Morse-D, Oregon (1900-1974); President John Fitzgerald Kennedy-D (1917-1963); Senator Thomas Henry Kuchel-R, California (1910-1994); Senator Hubert Horatio Humphrey-D, Minnesota (1911-1978); Senator Roman Lee Hruska-R, Nebraska (1904-1999); From the JFK Library; Photographer: Robert LeRoy Knudsen, (1929-1989)

In a sense, though while Greeks and Romans were inspirations, Americans perfected the three-branch bicameral democratic republic form of government. And we’re still perfecting it today. It’s part and parcel of that “in order to form a more perfect union” thing.

So, now it comes time to mention the obvious: While some loudly say government is too large, others say it is way too small to be either efficient or effective. I am among those in the latter camp, and will show and explain why as follows.

First, it’s preposterously absurd to imagine that a foundling nation with a total population which was then less than half the size that New York City is now, would, could, or should have a smaller government as it grew and matured. In the same way, no one wears the clothes they did as a 10-year-old child, and as adults, they purchase and/or make larger garments to suit their needs and wants. Similarly, no one should expect government to decrease in size.

More than anything, these matters speak directly to efficiency and effectiveness of government, which our nation’s founders also understood very well, which is also why

The U.S. Economy In 6 Simple Pictures

Picture #1:

It’s fairly explanatory. American corporations are making profits hand over fist. They’re making more profit now, than before the “Great Recession.” In fact, they’re making more than DOUBLE from their lowest during that time.

Corporate Profits After Tax

 

 

 

 

 

 

 

 

 

 

 

 

Pitchfork in the Road: America’s Economic Future – Poverty & Insurrection, or Abundance & Peace?

“How much is enough?” is a qood question to ask many folks, especially some among the Wall $treet crowd.

And to be certain, the two principles of “the worker is worthy of their hire,” and “You must not muzzle an ox to keep it from eating as it treads out the grain” are equally compelling ethics.

As those two ethics concern our nation’s economy, we can point to times in history where various nations suffered revolution, and the most common causes of revolution.

In fact, I wrote at length about it in this blog in 2011, and observed in part that, “…it’s not as if uproars have never happened before. They happen with great regularity and frequency. In fact, they’re quite predictable. Yes, predictable. It’s called “history.” The maxim goes something like this: “Those who forget the lessons of history are condemned to repeat them.” And so, any reasonable or prudent person should ask, “What are the lessons of history?””

Just remember this: Food, Clothing, Shelter. If you can’t get them with what you have, you’ll fight, kill, go to war, or civil insurrection, to obtain the basic necessities of life.

—

The Pitchforks Are Coming… For Us Plutocrats

By NICK HANAUER
Nick Hanauer is a Seattle-based entrepreneur.

July/August 2014

Memo: From Nick Hanauer
To: My Fellow Zillionaires

You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.

Nick Hanauer
With over 30 years of experience across a broad range of industries including manufacturing, retailing, e-commerce, digital media and advertising, software, aerospace, health care, and finance. Hanauer’s experience and perspective have produced an unusual record of serial successes. Hanauer has managed, founded or financed over 30 companies, creating aggregate market value of tens of billions of dollars. Some notable companies Include Amazon.com, Aquantive Inc., (purchased by Microsoft in 2007 for $6.4 billion), Insitu group (purchased by Boeing for $400 million), Market Leader (purchased by Trulia in 2013 for $350 million). Some other companies include Marchex, Newsvine, Qliance, Seattle Bank and Pacific Coast Feather Company. – Photo by Robbie McClaran

Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are

Economic Research: The Dismal Science finds poverty & inequality greater in U.S.

Poverty, inequality and redistribution

Focus

Jan 17th 2012, 20:27 by The Economist online

 Governments can reduce poverty and inequality through taxes and cash transfers. Successful programmes such as Progresa-Oportunidades in Mexico and Bolsa Família in Brazil have helped reduce poverty and inequality in the last couple of decades, but compared with rich countries, Latin American countries still fall short. According to a new report by the OECD, a club of mostly rich countries, Chile is

Do We Now Know Enough About Mitt Romney’s Taxes?

MAKING SEN$E — September 28, 2012 at 5:04 PM EST

By: Paul Solman

US Republican presidential candidate Mitt Romney speaks at a town hall meeting at Central High School in Grand Junction, Colorado, on July 10, 2012, where he said he has ‘nothing hidden’ in his taxes. Photo by: Nicholas Kamm/AFP/Getty Images

It’s hard enough to figure out my own taxes every year without having to worry about Mitt Romney’s. But because the issue of Romney’s taxes has come to loom so large, I thought I’d better get some professional advice. So I sought out a friend, estate planning lawyer Matthew Berlin, who has modest clients like me as well as the high and well-heeled, some of them with assets abroad. I asked him if we now knew all we need to know, at least with respect to the tax returns Mitt Romney has disclosed publicly.

No, said Matthew. There are a host of questions that any inquiring tax attorney or journalist might ask. Without them, a true picture of Romney’s finances would be impossible. So I asked Matthew if he wouldn’t share the questions with us. Here they are:

How to End This Depression

It’s been said that ‘everything should be made as simple as possible, but not simpler.’

The distinguished Dr. Krugman – who accurately foretold in 2001 that the “Bush Tax Cuts” would create significant deficit (and they did) – understands the role of government in providing opportunity for entrepreneurs and private enterprise, and the equally important role that government has in responsibility to protect public health and safety.

The long and short of it is this: Government spending on economic infrastructure (including education) is a good investment because it yields significant immediate and long-term results.

Why?

Because Materials and Manpower ALWAYS come from the private sector.

Regular readers of this blog will be familiar with the aforementioned premise, and the numerous times about which I have written in detail about the same. This entry illustrates with three excellent examples of that principle.

Naysayers and critics miss one very important factor in their analogy, which is that the Federal government has the power and authority to print money. The way that factor relates to the issue at hand is this: While the government could – in theory, and in reality – print enough money to give $10,000 to every man, woman and child in this nation the net effect of so doing would be to devalue the money, which would be resulting from inflation.

How to correct, resolve or work within the guidelines of that factor is to understand that one very important role of government is to provide OPPORTUNITY for entrepreneurs and private enterprise. By providing opportunity, government is also encouraging private enterprise and entrepreneurship. And, for the strict Constitutionalists, courts have continued to uphold and acknowledge that such power is contained within the Preamble’s clause “to promote the general welfare.”

Further, for the “anti-Big Government” naysayers, it is preposterous (contrary to reason or common sense; utterly absurd or ridiculous) to imagine that, in this era, with every technological advance, invention and discovery which has been made since 1776, and with our population (now approaching 312,000,000), that we would have fewer laws, rules and regulations than when we first began.

And, for those who say we should balance our budget, I would agree. However, I hasten to point out, that the last time that was done was under Eisenhower and LBJ. That does not excuse us from an ongoing civil discussion and debate about how to effectively manage our nation’s budget. Perhaps a formula of some type which would take into account GDP, debt (outstanding Treasury notes), trade deficit, population growth, birth rate, and other factors – with an “escape” mechanism for times of civil emergency or war, of course.

For such, we need technocrats – experts in areas of operations – rather than bureaucrats. Perhaps in an advisory role. But then again, we have those.

So… why don’t we work together as we ought?

Politics.

It seems that “Everybody’s got something to hide except for me and my monkey.”

—

May 24, 2012

Paul Krugman

The depression we’re in is essentially gratuitous: we don’t need to be suffering so much pain and destroying so many lives. We could end it both more easily and more quickly than anyone imagines—anyone, that is, except those who have actually studied the economics of depressed economies and the historical evidence on how policies work in such economies.

President Obama on a tour of the Master Lockfactory in Milwaukee with the company’s senior vice-president, Bon Rice, February 2012; Susan Walsh/AP Images

The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending. Never mind all the talk of how we have a long-run problem that can’t have a short-run solution—this may sound sophisticated, but it isn’t. With a boost in spending, we could be back to more or less full employment faster than anyone imagines.

But don’t we have to worry about long-run budget deficits? Keynes wrote that “the boom, not the slump, is the time for austerity.” Now, as I argue in my forthcoming book^*—and show later in the data discussed in this article—is the time for the government to spend more until the private sector is ready to carry the economy forward again. At that point, the US would be in a far better position to deal with deficits, entitlements, and the costs of financing them.

Meanwhile, the strong measures that would all go a long way toward lifting us out of this depression should include, among other policies, increased federal aid to state and local governments, which would restore the jobs of many public employees; a more aggressive approach by the Federal Reserve to quantitative easing (that is, purchasing bonds in an attempt to reduce long-term interest rates); and less timid efforts by the Obama administration to reduce homeowner debt.

But some readers will wonder, isn’t a recovery program along the lines I’ve described just out of the question as a political matter? And isn’t advocating such a program a waste of time? My answers to these two questions are: not necessarily, and definitely not. The chances of a real turn in policy, away from the austerity mania of the last few years and toward a renewed focus on job creation, are much better than conventional wisdom would have you believe. And recent experience also teaches us a crucial political lesson: