Trickle Up Economics?

Discussion in 'Politics, Religion, Social Issues' started by mactastic, Aug 18, 2004.

  1. mactastic macrumors 68040

    mactastic

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    #1
    These two stories have stood out to me in the last couple of days.

    1. Income Disparity Grows

    Over two decades, the income gap has steadily increased between the richest Americans, who own homes and stocks and got big tax breaks, and those at the middle and bottom of the pay scale, whose paychecks buy less.

    The growing disparity is even more pronounced in this recovering economy. Wages are stagnant and the middle class is shouldering a larger tax burden. Prices for health care, housing, tuition, gas and food have soared.

    The wealthiest 20 percent of households in 1973 accounted for 44 percent of total U.S. income, according to the Census Bureau. Their share jumped to 50 percent in 2002, while everyone else's fell. For the bottom fifth, the share dropped from 4.2 percent to 3.5 percent.​

    2.Tax Burden Shifts to the Middle Class

    Since 2001, President Bush's tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign.

    The CBO study, due to be released today, found that the wealthiest 20 percent, whose incomes averaged $182,700 in 2001, saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.

    Over that same period, taxpayers with incomes from around $51,500 to around $75,600 saw their share of federal tax payments increase. Households earning around $75,600 saw their tax burden jump the most, from 18.7 percent of all taxes to 19.5 percent.​

    So the super-rich are getting taxed less on the theory that it will improve things for the rest of us, yet all the evidence seems to point to them getting richer and the rest of us stagnating.
     
  2. Steradian macrumors 6502

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    #2
    Rich people Vote, and Put jokers in the white house and congress :(
     
  3. IJ Reilly macrumors P6

    IJ Reilly

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    #3
    Here's your recovery, Mr. Bush.
    With Deluge, Longshore Jobs Become Long Shots

    By Ronald D. White
    Times Staff Writer

    August 18, 2004

    Hundreds of thousands of applications have poured in for 3,000 temporary jobs at the ports of Long Beach and Los Angeles — about 10 times as many submissions as expected — underscoring just how hungry people are for high-paying work in a weak labor market.

    The International Longshore and Warehouse Union was so concerned about the crush of applicants that it asked a mediator Tuesday whether the hiring process could be delayed to ensure that everything runs smoothly. The mediator, however, ordered the union and West Coast shipping lines to proceed with their lottery and begin picking the 3,000 new dockworkers Thursday, as planned.

    As word spread Tuesday about the flood of applications, some would-be dock hands were discouraged.

    "This is almost like going to the horse track and betting on the long shot," said Raymond Sheets, a 47-year-old tree trimmer from San Diego who hopes to improve his lot by landing a job at the harbor.

    The 3,000 slots, which are being offered to help handle a record amount of cargo coming through the ports, will pay $20.66 to $28 an hour — substantially higher than the average $8.38-an-hour entry-level wage in Los Angeles County. On Friday, the state reported that California's employers cut a net 17,300 jobs in July, illustrating how cautious many businesses remain when it comes to hiring.

    "It's very rare in this economy, particularly for non-college-educated positions," to be so lucrative, said Michael Mische, a principal at WCL Consulting Co. of Long Beach and an adjunct professor of management at the USC Marshall School of Business. "These are highly desirable jobs, with the opportunity of becoming skilled in a vocation" that could lead to better things down the road.

    Indeed, it's not clear how long any of the 3,000 jobs might last. But in at least some cases, if workers accumulate enough hours, they may be able to join the union full-time.

    To apply, people were supposed to fill out a postcard bearing name, address and telephone number, and get it in the mail by last Friday. The only requirements: Be at least 18 years old, have a driver's license and be legally eligible to work in the U.S.

    A Long Beach post office spokesman said Tuesday that a conservative estimate put the number of mailed-in applications at between 220,000 and 250,000. A shipping lines' representative suggested that the tally could climb substantially higher before Thursday's lottery.

    The number of cards may have been inflated by applicants sending in more than one each, though officials have said people who do so would be rejected.

    Even the current count far outstrips the most imaginative estimates of both dockworkers and shipping company executives, who were expecting no more than 25,000 to 30,000 to sign up for the jobs.

    ...​

    http://www.latimes.com/news/yahoo/la-fi-portjobs18aug18,1,7488477.story
     
  4. kuyu macrumors 6502a

    kuyu

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    #4
    My mom works 60 hours a week, second shift, in a factory. She goes to work at 4 PM and gets home at about 5 AM. If she married someone she works with, that would put us into the "top percentage".

    I assure you, we're not jet setting for fun. We don't decide which yacht to use this weekend. We don't have a butler, haven't taken a vacation in two years, we do shop on a budget, we do clean our own house, don't have a TV over 27", all drive cars with over 100,000 miles (mine has 188,000), we rarely eat out, and don't have HBO.

    My mom payes tons of taxes. She is dating a guy at her income level. If they were to get married, Kerry will raise their taxes. It's like my mom is punished for working her @$$ off. Meanwhile, some of my old friends spend 95% of their time doing drugs and collecting gov't money. And they complain about how easy "rich" people have it.

    My point: There's a major difference between the %'s at the top. Why punish the hardest working people just to "stick it" to trust fund babies. Not fair at all.
     
  5. yellow Moderator emeritus

    yellow

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    #5
    That sucks! That's me! No wonder I never voted for that fool in the first place.. he can't even say NUCLEAR correctly.
     
  6. mactastic thread starter macrumors 68040

    mactastic

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    #6
    Your mom makes over $125K annually working second shift in a factory? For reals?
     
  7. 2jaded2care macrumors 6502

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    #7
    FWIW, neither can Jimmy Carter, and he worked on a nucular sub. Maybe it's a regional thing, like JFK's "Cuber".
     
  8. IJ Reilly macrumors P6

    IJ Reilly

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    #8
    So I've been told. But with this in mind, I actually listened to Carter and he pronounces it nuke-lar with his jaja accent, not nuke-u-lar, as Bush does. The former seems regional, the latter, just plain wrong (similar to re-la-tor, an incorrect pronunciation or "realtor" shared by about 90% of Americans).

    Now, what were we talking about again? Oh, that's right -- jabs, as they say in Chicago. :)
     
  9. Taft macrumors 65816

    Taft

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    #9
    So far as I can tell, the second article is reffering to personal income, not household income. If this is the case, that puts her about in the middle class category (I took the bottom level of the top 20 % and divided it in half, as you stated that doubling her income would put her in the "top percentage." 180,000 / 2 = 90,000). As the article points out, this level of income has seen an increase in their tax burden under Bush.

    Seems to me that Kerry has actually said he wants to reduce taxes on the middle class and raise them on the upper class. I think that your mother, married or not, would stand to benefit from that policy. Care to explain differently?

    Taft
     
  10. Bobcat37 macrumors member

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    #10
    One problem kuyu is that it seems to me people on the fiscal left tend to consider anything over ~100k+ a year as "super rich" which is absolutely ridiculous IMO.

    My parents own a small business that they have built up from bankruptcy for 20+ years (and both have workes their @$$es off as your mother has) and today they make a healthy income that is definitely above 100k+, yet we are not a "super rich family" (admittedly we have a comfortable lifestyle, but that is because my parents still work both of their @$$es off to this day, our life is not a free ride, and they probably won't be retiring for a while). They can still find themselves struggling to pay bills (and trust me, when tax day comes around, that is one of the biggest struggles, the amount of taxes they pay is crazy in my opinion), whether they be personal or business related (and my family has had many medical bills throughout life, thus the bankruptcy many years ago). Even though small businesses like my parent's are vital to this friggin economy, Kerry surely would raise taxes on my parents and further punish them for building a successful small business for 20 years.

    Many liberals don't believe in equality of taxation, they believe in equality of wealth. I'm still just waiting for the day that we can have a truly fair tax system like a national sales tax (and of course even that would have to be adjusted for low income families so it wouldn't be regressive). A national sales tax would not only be some serious fuel to our economy, it would tie up a lot of loopholes in our current system that the rich can abuse.
     
  11. kuyu macrumors 6502a

    kuyu

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    #11
    Her taxes, believe it or not, are lower today than they were 4 years ago. She makes more money now, but not a ton more.

    I find these articles interesting, but not true for our families situation. We have done very well under Bush as far as taxes are concerned. But, they are still rediculous. After FICA, SS, Medic, Federal, State, and double-local (two counties), she pays ~44% in taxes. Her Fed's are down, all others unchanged. Thus, lower tax rate.

    All of this is nominally speaking, of course, so were she to recieve a $1,000 bonus, bring home would be ~$550.

    As an aside, I owed $62 in federal taxes last year. That's less than 5% of my free-to-all students gov't sponsored scholarship, KEYES. It's a shame how bad us poor people have it. (I am very poor by the way)
     
  12. Bobcat37 macrumors member

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    #12
    I'm gonna guess that was sarcastic? It seems that because of the insane amount of taxes you are paying, you will have to buy one less Xbox game this year. My heart goes out to you kuyu...
     
  13. mactastic thread starter macrumors 68040

    mactastic

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    #13
    Just so you know Bobcat, I don't consider the super-rich zone to start until you hit about $500,000 per person ($1,000,000 per household). And that's income per year, not net worth. Do I still fit your preconcieved notion of a fiscal liberal?

    Where do you draw the line for the super-rich?
     
  14. skunk macrumors G4

    skunk

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    #14
    I draw it quite a bit higher than that. That's just comfortable. Super rich, over here at least, has to be 2 million quid a year, about $3m.
     
  15. yellow Moderator emeritus

    yellow

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    #15
    SUPERrich? $1million+ per annum.
    rich? $250,000+ per annum*

    *people might scoff at the idea of making $250,000 a year as rich, but let's face it people, if you make more then 10x the average household income in the US.. you're rich.
     
  16. IJ Reilly macrumors P6

    IJ Reilly

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    #16
    This talk about the "comfortable" the "rich" and the "super-rich" makes very little sense to the little analyst in my head. Why not talk in terms of the top quartile, decile and one or two percent of taxpayers? Then we know what we mean. For instance, we know that the repeal of the inheritance tax only benefits the top two percent of taxpayers. That's a tax break aimed directly at the wealthiest Americans, without any question. So we know any taxes not paid by them gets made up by someone with less assets or a lower income. Maybe we can talk about tax fairness in that context.

    Also, the figures cited in the articles at the top of the thread clearly illustrate a shifting of the tax burden away from the wealthiest of Americans and onto the middle income brackets. Could we possibly discuss the equity of that phenomenon?
     
  17. blackfox macrumors 65816

    blackfox

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    #17
    Kuyu/Bobcat, I found your posts very interesting and valid from your pov...

    Now I am not a tax-expert nor one on economics, but it would seem to me that the vast majority of Americans have not acheived the financial success your families have, and many(if not all) of them work just as hard from day to day, and have the same expenses to cover. A family where both parents work yet make 75K combined, still have to provide health insurance, housing, food and the assortment of other misc taxes (FICA etc)...their burden is considerably higher as a % of total income than those making over 100K, obviously...and these are households where wages are often stagnated, and tax-burdens have risen...

    So, in thinking about what is "fair" for taxation, would you not want to give the maximum amount of people a tax-break? My feelings is that would encompass the lower-middle class(es)...
     
  18. Bobcat37 macrumors member

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    #18
    Mactastic - that's pretty reasonable. There are people out there who would set the standard lower I'm sure.

    skunk - you brought up a very important point by saying "over here". Wealth can definitely differ between where you live in our country. My family lives in Colorado, if we moved out to like Idaho (just using this an example, not sure it if is true or not) and made the same amount of money there as we do here, then we would in all reality be considerably more wealthy, and living is just plain cheaper in Idaho (again, not sure if that is true, just making a point). And if my family lived in New York and made what we do here, we would probably be considered less wealthy than we are now.

    IJ - I agree using words like comfortable, rich, or super-rich are pretty subjective and not really a good way to describe things. And as skunk pointed out, you can be "rich" based on your income in one state and merely be "comfortable" with the same income in another state. As for fairness, it depends on how you define fair. I read the article mactastic posted, and there is one other intersting part to it that he did not quote:

    As you can see there are 2 sides to every issue. Also, bear in mind, if the top 20% are already paying for over 60% of the federal income tax, shouldn't they receive the most back in a "tax cut"? That is what I would define as fair.

    blackfox - Well that's the goal I suppose, finding a truly fair system of taxation. I know there are several different ideas out there, but one I have looked into a bit myself (and what I've read about it sounds pretty good) is this one. From what I gather it is basically a national sales tax that would be set around 30%, but it also has plenty of rebates for lower-income people. If interested, take a quick look at it, I'd suggest going here, and then look at their FAQ for some of the basic ideas behind it.
     
  19. Neserk macrumors 6502a

    Neserk

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    #20

    JC was from the south. It was his accent. GW has (probably) a learning disability which makes it difficult for him to get his words out correctly.
     
  20. Neserk macrumors 6502a

    Neserk

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    #21

    Learning Disability. The sad and pathetic thing is that unitl someone rich and famous comes out and starts talking about these things they stay hidden. A lot more parents are paying attention to their children's eating habits now that Mary Kate Olsen has been hospitalized for anorexia... Bush could be advocating for better Special Education and diagnostics instead he is going to war and killing people. When you have power, you have responsibility. When you have something obvious like he does you should use that power to help others like you who don't have a rich mommy and daddy.
     
  21. mactastic thread starter macrumors 68040

    mactastic

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    #22
    First off, there is no point in discussing the unfairness of the income tax burden alone. The income tax does not operate in a vacuum. The only responsible way to discuss tax fairness is to include the entire tax burden. The GOP likes to talk about how the income tax is so progressive and painful to the rich, but you rarely hear them saying the same about the regressive taxes that hit the poor harder.

    Secondly, if the top fifth of wage earners make 60% of the income in this country, wouldn't you think it's fair that they pay 60% of the taxes?
     
  22. IJ Reilly macrumors P6

    IJ Reilly

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    #23
    I never accused him of lacking a sense of humor, but I don't believe what he's got can be classified as a speech impediment. It's not a stammer or a lisp. Things just come out wrong. As others have noticed, whatever you call it, it seems to manifest itself most often when he's speaking extemporaneously about unfamiliar topics. I think everyone of us has experience talking with people who try to sound authoritative on subjects they know little about. That's the way it comes out. Coincidence? I don't think so.
     
  23. Neserk macrumors 6502a

    Neserk

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    #24
    Wow... and I'm happy when I can pay my rent, all my bills, and have enough money left over to buy fresh fruit and vegetables...

    I look forward to the day I pay 44% of my income in taxes *and* can afford a vacation. Must be nice to make that much money.

    I work extremely hard. And I am well educated. I started substittue teaching (for the school year) last August 18th and worked straight through the end June. The only days off I had were when I was too sick to work (3, maybe 4 days) or there was no school. I work more than regular teachers because I don't get 3 months a year off. A retired police officer once told me that substitute teaching is more stressful than being a police officer. Teachers who have done both will tell you that substituting is more stressful than being a full time classroom teacher. Hopefully this time next year I'll have my own classroom :D
     
  24. Neserk macrumors 6502a

    Neserk

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    #25

    One last time (this isn't just for you).

    Learning Disability
     

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