Amber Waves of Green

http://www.gq.com/news-politics/big-issues/201207/amber-waves-of-green-jon-ronson-gq-july-2012?printable=true

by ido • 14 years ago

198 203 14 years ago

ido• 14 years ago

TED talk from Nick Hanauer (2nd richest amazon guy in the article): http://www.youtube.com/watch?v=bBx2Y5HhplI

batista7• 14 years ago

>Frantz washes dishes at the Capital Grille restaurant, a posh steak house near the harbor in Miami's financial district. He nets $200 for a twenty-seven-hour week and receives no food stamps or government assistance of any kind.

I HATE any kind of posh establishment that doesn't pay it's employees well.

When I want to spend some money on a posh restaurant or hotel (not that I have any money to do that often) I don't want the people tending me to be making minimum wage, while dinner costs $200 per person. Pay your bloody employees better.

To me, any establishment that does that kind of thing, are fake-posh. Paying their staff like shit is like having a huge chandelier made of plastic, or "silverware" made of nickel.

bgilroy26• 14 years ago

Don't knock it if you haven't tried it

http://www.darden.com/restaurants/

twoodfin6• 14 years ago

I bet there's some competition for those dish-washer jobs: If you believe the article, he's being paid more than minimum wage since he's netting $7.40/hour after FICA and other taxes.

Why is he only working 27 hours/week? If he's serious about raising himself out of poverty, finding another part-time job would seem to be a priority.

rsheridan66• 14 years ago

Who says he's paying FICA and other taxes? I worked for the same employer (Darden Restaurants) when I was fresh out of high school, and I saw the pay stubs of the immigrant workers - they did not pay any of that. Their take home pay was their hourly rate * the number of hours worked. That was a long time ago (mid 90s), but I have no particular reason to believe anything has changed.

Klinky5• 14 years ago

He may be working more than 27 hours a week, his employer got in trouble for clocking people out before they actually stopped working. He has to take the bus & sometimes misses the last one late at night causing him to walk home. Commuting alone could very well be his other part-time job.

It's probably not terribly easy to find another part-time job when you're a Haitian immigrant without the best English skills and not much on your resume. Even if he found another job would it conflict with his current job? Most jobs don't care if you have another job on the side, they want you there when they want you.

Also sounds like his ego/pride has taken a beating from the treatment he's received. When you live at the bottom for awhile you start feeling like you're going to be there forever. The honest truth is that many do stay at the bottom forever.

I am not sure why the food industry loves to underpay people. I think the last thing we need are lowly paid workers, with no healthcare, pressured to come in when sick making our food.

fsidca3• 14 years ago

I would like to politely suggest that a) finding full-time work when desperately poor is maybe not as easy as you seem to believe, especially when there are massive transportation issues at play and b) the tendency to focus immediately on what the poor could be doing better, instead of on how the rest of us could do a better job in helping them, is kind of insane (though extremely popular on the internet).

Could Maurose Frantz raise himself out of poverty if he just pulled a little harder on them faithful ol' bootstraps? Maybe! You'll never know, of course, since you don't know his actual situation and have almost certainly never known anything like it, but your go-to move of imagining that this is the case--that it's basically 'his fault' he's poor--is definitely a good way to calm your conscience. We all sleep better when we're convinced the world is just.

Maybe you've gathered from my tone that I don't think this is exactly the smartest way to go about fixing America's problem with poverty.

batista7• 14 years ago

>Why is he only working 27 hours/week? If he's serious about raising himself out of poverty, finding another part-time job would seem to be a priority.

Have you accounted for the commuting time? Like the bus that eats away 2 hours every day, and that he sometimes he has to wait for 3 hours?

Plus, nobody raised himself out of poverty by getting multiple part-time, bad-paid jobs. The way to do it is to get a better paying job.

Also: those 27 hours, are they regular, or the boss can reschedule him as he pleases (as often happens)?

This book is an eye opener of how people doing these jobs get by:

http://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/08...

(the journalist forfeited her money et al, and worked and lived as a minimum wage employee for a year or so, in order to write the book).

npsimons• 14 years ago

Why is he only working 27 hours/week? If he's serious about raising himself out of poverty, finding another part-time job would seem to be a priority.

Maybe they won't let him work more hours per week? Many businesses do just that so they can claim the worker as "part-time" permanently and not pay for their benefits or give them leave.

As for a second part-time job, as others have mentioned, it's hard to look for work when your commute can eat up to 5 hours of your day and you don't get off work until 1AM.

Lost_BiomedE3• 14 years ago

I think, for restaurants, what happened was commercial real-estate getting crazy expensive and clientele not cooking for themselves like they used to do. The first hurt wages as many restaurants were fighting thin margins, and the second made it easier for restaurants to sneak in the untrained to cook. Once the untrained were acceptable, it was a race to the bottom.

phillmv2• 14 years ago

You've reversed your economics.

In Miami there is merely a surplus of unskilled labour desperate to work under the table. They don't pay more because they don't have to.

capsule_toy• 14 years ago

Do you actually know what the margin is or are you just making an assumption? There are certainly posh places that use cheap ingredients and overcharge to get a high margin, but from what I understand, most places can't get away with that. Margins are actually quite low because of the competitiveness of the restaurant industry.

geuis• 14 years ago

I have some perspective on this. I'm a white guy that lives in San Francisco. I also used to live in South Florida and spent a lot of time in Miami.

My ex-girlfriend of 8 years was Haitian. I got to know and love her parents, Marie-Ange and Frantz. They moved from Haiti in the 60's to NYC, then later to Miami when my ex was a girl.

I had a chance to learn a lot about Haitian culture and history. They are, almost without exception, some of the nicest and hardest working people I've ever met. Some of her family are doctors, lawyers, and musicians. Others struggle everyday to put food on the table. Frantz never spends much money, and worked as a foreman for years. He helped to build a lot of modern Miami. Despite never having an abundance of money, he always gave to help others.

Miami is a very, very hard place to get ahead. It is, per capita, one of the poorest cities in the US. The opportunities for most people, especially immigrants, are lacking. Frantz in the story is likely doing the best he can to support his family in a very shitty situation. Based on my experiences, I will make the claim that it's nearly impossible for him to find a second job. He's likely another hard working, striving young man like countless others I know. But his opportunities in the place his family lives don't make his life easy.

I don't know if there's a clear point to my story, but I hope my experiences provide some extra background to the discussion.

It's a real scandal that a person that makes 500.000 $ a month pays only 11% taxes. This system is completely unfair. This is not liberalism: this is simply the law of the strongest.

yummyfajitas22• 14 years ago

I agree. It is a scandal that reporters constantly focus on the individual tax bill of investors while completely ignoring taxes paid by the corporations they own.

The solution is simple: stop taxing corporations and replace it with taxes on capital gains/etc. (Also, while we are at it, equalize the taxation of cap gains, dividends and interest.)

scarmig4• 14 years ago

Indeed. Corporate taxation makes for good applause lines, but at least in our particular system it's basically a giant target for "lobby for special tax breaks, but only if you're rich enough to hire a staff of lobbyists."

My favored solution is having two taxes: a heavily progressive consumption tax, and a flat capital gains/etc. tax. Because what people usually are bothered by are the Paris Hiltons of the world, not the humble billionaire featured in the article.

KaoruAoiShiho• 14 years ago

Wouldn't that be great for foreign investors?

yequalsx9• 14 years ago

It's a simple sounding solution but I'm skeptical of the issue being that simple. There's a world of difference between GE style corporation and an S-corp owned by a single person.

The GE type corporations effectively pay very little tax in the present system. They also have the right to spend an unlimited amount of money on election campaigns. In the U.S. system corporations are treated as persons. If a person makes an income (profit) they get taxed.

What we presently have is a broken system in my opinion. The very rich earn their money through capital gains and the capital gains tax is very, very low. The very wealthy in the U.S. do not pay a fair share of the tax burden or for the cost of government. Perhaps eliminating corporate taxes while simultaneously greatly increasing capital gains taxes would be good. There could also be some bad consequences to eliminating corporate taxes altogether.

rubashov3• 14 years ago

> replace it with taxes on capital gains

The reasons capital gains taxes are lower than income seem sound to me. You want capital formation and savings.

There's only a problem because the government inflates the currency and manipulates interest rates down. This subsidizes speculation. The solution is just higher interest rates.

T-hawk2• 14 years ago

Although technically true, there's a very widespread misconception underneath that. The low tax rates for business-derived income such as capital gains and dividends exist because that income was already taxed at the corporate level. Uncle Sam already got his bite out of the corporate balance sheet. http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_Sta...

If these business gains were retaxed at the personal level as ordinary income, that would incent company owners and directors to keep the money in the company's coffers safe from taxation. Then you have corporations sitting on illiquid wealth. Giving personal tax breaks for these business gains creates incentive to distribute money back to the economy to be spent and continue flowing.

I'm surprised to see a reputable publication like GQ repeat the "rich people pay low taxes" fallacy. But it's such an easy way to score pandering points that pretty much every business article and publication spreads the misinformation now.

mistermann2• 14 years ago

Are you implying that the corporate tax + capital gains tax is roughly equal to that of earned income?

rayiner8• 14 years ago

I've seen this "double taxation" argument in favor of a lower capital gains rate, and it's a flawed one. To see why, consider that your nanny doesn't get taxed at a lower rate just because you pay her with income that was taxed when you received it. The corporation is a distinct legal entity and it is taxed as such.

This taxation scheme isn't gratuitous. The corporate vehicle offers investors the tremendous advantage of limited liability. When it comes to a creditor's suit against the company, the corporation is treated as a distinct entity and the investor is not liable in such suits beyond his investment. The cost of being treated like a separate entity in lawsuits is being treated like a separate entity when it comes to taxation.

Limited liability is not free. When creditors cannot collect because an investor's corporation has insufficient assets, they bear the losses of activity that is attributable to and generates profits for the investor. If investors did not want to be taxed this way, they could reorganize their investments as partnerships. That way they would be taxed as individuals and bear liability for their business activities like individuals.

GiraffeNecktie2• 14 years ago

It would be nice if there was some incentive to share a little of that income with the company's employees rather than only with the owners and directors.

drucken2• 14 years ago

I would suggest actual misconceptions are that:

1. Fungability: companies have similar tax flexibility as individuals and are therefore comparable.

2. Consumption equivalence: that income from capital gains or "personal tax breaks for these business gains" is actually redistributed back into the general economy in the same way as it would be as general (wage) income.

Both are clearly incorrect.

I would go a step further to suggest the US has a relatively high corporation tax compared to other developed countries precisely to compensate for other tax code deficiencies and trends.

Of course, in a sense, all the current arrangements do is capture the "middle" or "poor" class of corporates. Large or sophisticated corporates, especially financial companies, have very extensive means to ensure minimal or even, in some cases, no tax is ever paid.

A preliminary and revealing book on this issue for laymen is Shaxon's "Treasure Islands" (http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-B...).

ams61104• 14 years ago

I don't know, that guy in particular seemed to be pretty loose with his money. Lots of travel, private jets, etc. He may not think he is "creating jobs" and maybe is isn't directly, but all that spending keeps a lot of people employed.

twoodfin6• 14 years ago

That's not even the half of it. Presumably most of his wealth is in either stocks or bonds. In stocks, it's providing capital to enterprises to produce products people want to buy and likely hiring a couple of people to do it. In bonds, it's either doing that, too, or funding government projects like roads and schools.

pg4• 14 years ago

Not necessarily. For example, if someone made that from municipal bonds, as a lot of rich people do, additional tax has in effect already been deducted in the form of the lower interest rates that such bonds pay.

BadassFractal• 14 years ago

I wonder what folks on HN thought of PG's essay on this subject: http://paulgraham.com/gap.html

I'm simply not sufficiently well versed in economics to be able to judge what's best for society. I'm also hoping that this is not purely subjective, and that indeed there might be an optimal golden middle.

On one hand PG's arguments make sense to me, on the other, I cannot but feel pulled in the opposite direction by some kind of populist/socialist desire to chip in more and make society a better place. That said, I don't have millions (billionaires seem to be more generous, so I'm not going to consider them) and thus if I ever were to become wealthier, I wonder if I also would really mind sharing more.

I already don't particularly enjoy paying 30% or more of my income, but I feel like I'm doing my part (being originally from EU perhaps conditioned me to think that this is "the norm"), although I wish that money was better spent by the people in power.

rsheridan66• 14 years ago

Paul Graham convincingly argued that the existence of wealth inequality was not a bad thing, compared to a completely level society, but nobody is really arguing for a completely level society where dishwashers make as much money as doctors and entrepreneurs.

Look at the second richest person in the article, the Amazon investor - no doubt he believes that entrepreneurs and investors like himself should be allowed to get rich, as does pg, yet he favors increased taxes on the rich. Paul Graham's article doesn't deal with his arguments, which are far more common in the real world than arguments for a return to the 98% tax rate of 70s Britain or the economics of East Germany, which are the most relevant real world cases pg refers to (at least nobody was arguing for that at the time pg's was written - I'm not quite sure about the Occupy crowd today). So pg devastated a strawman.

marbletiles9• 14 years ago

The essay is truly horrible. I don't have the time to take it to bits, but a couple of starting points:

- he conflates earnings and effort, as if by earning 100 times you were necessarily 100x more productive at some point.

- related: wealth is categorically different. The worst chess player and the best chess player must both play the same game. But if chess were wealth, the poor guy would have to carve his own pieces and rent the hall, while the rich guy would turn up and sit while the game played itself, no effort required

- he's right that the middle-classes are the true engines of wealth creation, not the rich. This is the crux of the problem: income inequality destroys the middle class. It leaves only very poor and very rich. No middle class = no wealth generation. That is why it's an issue for everyone, and no amount of "smart people who work hard deserve to control 99% of capital" changes that.

yummyfajitas22• 14 years ago

Could you define "middle class", and perhaps explain how income inequality "destroys" it? By most common definitions, your statement can't be true.

Taking a typical relative definition, if the middle class is [50-X%, 50+X%], then by definition the middle class always makes up 2X% of the nation and nothing can destroy it.

If you take an absolute definition of middle class (i.e., middle class = home with X ft^2/person, tv, car, refrigerator), then inequality is pretty much unrelated to how many people are middle class.

In short, for your claim to be true, you must be using some uncommon definition of middle class. It would help to explain what it is.

pg4• 14 years ago

he conflates earnings and effort, as if by earning 100 times you were necessarily 100x more productive at some point

No I don't:

"When we talk about "unequal distribution of income," we should also ask, where does that income come from? Who made the wealth it represents? Because to the extent that income varies simply according to how much wealth people create, the distribution may be unequal, but it's hardly unjust."

rquantz• 14 years ago

When you travel to a rich or poor country, you don't have to look at people's bank accounts to tell which kind you're in. You can see wealth—in buildings and streets, in the clothes and the health of the people.

And you can see in the US that increases in wealth disparity have had a negative effect on some of these measures. Healthcare outcomes and the state of road repair are two headline examples of what suffers when the wealthy become so wealthy as to resemble an aristocracy rather than a bourgeoisie. It's often pointed out on HN that there is a seperate legal system for those with money. Likewise, the wealthy have outsized control of the legislative process and the levers of government in general, and they have used this power to enrich themselves at the expense of the lower tiers of society.

No, wealth is not a zero sum game, but when the wealthy use their power to make sure they don't have to contribute to the government purse and keep a greater share of corporate wealth for the very top of the hierarchy, they impoverish the rest of society by destroying the foundation that allows people with fewer advantages to turn their labor into wealth.

A 747 pilot doesn't make 40 times as much as a checkout clerk because he is a warlord who somehow holds her in thrall. His skills are simply much more valuable.

Pilots are also supported by a union that undoubtedly increases their pay. There are many more pilots than there are jobs for pilots, which suggests that they are not paid market rates.

I cannot but feel pulled in the opposite direction by some kind of populist/socialist desire to chip in more and make society a better place.

You can believe that wealth disparity is bad for the country without being some sort of squishy idealist. Most wealthy people are not like Paul Graham. They are largely in corporate management and finance. It can be argued whether CEOs are worth what companies pay for them, but it does appear that most people who truly have a lot of money are rent seekers, not innovators. And they have actively attempted to make it harder for people who are not already wealthy to become like them.

pg4• 14 years ago

You're right about 747 pilots. That was a singularly ill-chosen example.

yk• 14 years ago

I believe PG's essay is first of all too long, there are two or three interesting ideas in it and some libertarian propaganda pieces.

In the first part, he argues about different levels in skill which supposedly generate different levels of income. The argument works well for sport stars: A football team, that draws a crowd of 50,000 to a home match every two weeks, produces something like $25,000 per week per player. By contrast a slightly worse player who is never playing in a big league will at best generate 1/10th or 1/100th of this numbers. The crucial point here is, that the players are exploiting their personal skill to do this. By contrast in the case of an CEO, the immediate value is created by workers. ( The guys in the factory who actually assemble a product, not by R&D and not by the CEO himself). The CEO is merely responsible for creating an environment were the workers can effectively create value. Therefore the wage is not only based on his personal skill, but also on the skill of others.

The later sections of the essay are sometimes simply a libertarian straw man ( The Daddy Model of Wealth), sometimes very good ( in particular the second half of "The Lever of Technology").

runako3• 14 years ago

>> The CEO is merely responsible for creating an environment were the workers can effectively create value.

With the shortened tenure of CEOs, they often don't even have this responsibility in practice. The average tenure of an S&P 1500 company is something like 6.5 years. These companies generally have 20k-200k employees; I don't think anyone would argue that 6 years is long enough to create an environment where workers can create value in a firm of 200k employees. More like "don't screw up the environment that worked when you got there" in most cases. (Obviously turnarounds are different.)

There's another big problem with the theory that wealth is generally deserved because markets allocate it efficiently. CEOs of public companies generally make 100s of times what their employees make, even when they are actively destroying value. For example, compare the wealth destruction on Ballmer's watch with his compensation over the same period.

9hgf• 14 years ago

Why do you need to be versed in econ? Do you really think economists know what's best for society? That's scary. What you should be versed in is the flaws in the models that are taught in the standard econ curriculum and the ones that are accepted among the majority of economists.

pg's essay is interesting in that it's one of the few I've read that did not have a note indicating he received comments from others before publishing it.

Everyone has their own ideas about fairness, whether they are rich or poor.

The article does seem to suggest that the wealthy have some sort of conscience. They do think about the lower classes.

Here's a thought to ponder: What if we took all the poor folks out of America and put them in another country. Then the wealthy would not have to think about them. It might ease their conscience. A question for the economists: Would anyone's wealth be affected if we removed the poor?

msellout6• 14 years ago

Yes, someone's wealth would be affected. I have no idea what you mean by that question.

I'm an economist, and it really aggravates me to hear such misunderstanding of the profession. Try replacing "economics" and "economist" with "medicine" and "doctor" to hear how ludicrous it sounds.

But yes, I agree that many Econ 101 models are tragically flawed. Don't confuse introductory classes for the beliefs of the "majority of economists".

mgkimsal• 14 years ago

Was anyone else bothered by the pictures not matching up with the sections? Each picture was followed by a section that wasn't related to the text, which was a bit confusing.

robbiea• 14 years ago

Yes, I definitely was. I figured it out after a while, but it definitely bothered me.

seanalltogether• 14 years ago

I was also bothered that he glossed over his own income level so quickly, he really should've interviewed somebody else.

srs0001• 14 years ago

Glad that bugged someone else.

tomerv• 14 years ago

Also, for some reason all the 'ffi' trigraphs are replaced with 'ffl': For example, the second sentence in the first paragraph starts with "The offlce building..."

anothermachine5• 14 years ago

Some bizarre OCR technology, or special typesetting code from the print edition getting misinterpreted?

petercooper3• 14 years ago

The trials and tribulations of the poor and rich ends of the spectrum don't tend to surprise me, but the wildly varying ways the middle class perceives their incomes always does.

It surprised me that a family bringing in $900 a week ($47k per year) doesn't feel comfortable in Des Moines (statistically it's above local median). But then they note every 2 weeks they pay $375 for health insurance.. 20.8% of their pre-tax income! Yet their "state and federal" taxes are only about 10%?

For all the bleating about paying "less tax" than other countries, it's ironic that an ostensibly "free market" healthcare system is less efficient, more cartel-like and wildly more expensive for its users than, say, the "socialist" one in the UK where you could live well on the same money and still be paying your fair share without getting any handouts.

rubashov3• 14 years ago

> ostensibly "free market" healthcare system

Some guy said of sick care in America: The American health care system is socialism without a central plan, and capitalism without markets or prices.

You really have to pick one or the other of socialism or the free market. Our current system is the worst of both worlds.

michaelochurch• 14 years ago

You really have to pick one or the other of socialism or the free market. Our current system is the worst of both worlds.

That is the essence of contemporary corporatism. It has nothing to do with capitalism or socialism, because it's neither system. The problem is one of social topology, from which money disparities follow, but it's otherwise not really about money per se. Modern corporatism works like this: a well-connected, parasitic elite (~0.5%) gets the best of both systems: the chance of personal enrichment and the freedom of capitalism, and the safety net (up to outright governmental favoritism, as seen in corporate welfare) and low minimal expectations of socialism. The other 99.5% get the worst of both systems.

ams61104• 14 years ago

Are you excluding the "free" healthcare in the UK from your definition of "handout"?

What "fair share" of taxation would they be paying in the UK?

scarmig4• 14 years ago

I've always thought that the most damning part of the UK-US comparison is this:

The United States government spends substantially more per capita on healthcare than the UK (a number which, to be clear, excludes people's private spending and if anything understates things because it doesn't include the cost of tax breaks for employer plans), but fails to guarantee healthcare to everyone and has developed an underclass of people who have substantially worse healthcare than many second world countries.

The UK system is, in many ways, unique, in that it's severely underfunded but gets outstanding bang for buck. I wouldn't recommend it here, because I'd be pretty skeptical we could transplant the necessary consensus political support and willingness to say no to stupid treatments.

_delirium5• 14 years ago

I don't know how the UK system is funded, but the Danish system is funded with a flat 8% income tax (the sundhedsbidrag) applied to all income, with no deductions or exclusions. Pretty good deal overall imo, especially considering that it's not dependent on age or preexisting conditions.

petercooper3• 14 years ago

(For simplicity, let's assume a household with a single earner of $47k / £30k.)

Sort of, but not exactly. I was implying that a household with that income would be making close to a median contribution to the tax base so, purely in my own opinion, would be paying a "fair share" in absolute terms. That is, they should not be either highly subsidized or a major contributor. But.. let's run the numbers to see if my hunch is wrong! :-)

Said household would have a gross income of £30000, pay £4505 in income taxes, pay £2732 in "national insurance" (ostensibly to fund social security, sick pay, and various benefits), and be left with £22,762, or 75.9% of pre-tax income.

(A "hidden" part to this is that (most) employers also make employer "national insurance" contributions, in this case of £3164 so it could be argued this is a hidden salary cost for employees.)

The total NHS budget in 2008/2009 was £94bn and there are around 25 million households in the UK. This gives an expense of £3760 per household or 36% of the total earned in direct taxation on our imagined household. This is double the percentage of the national budget dedicated to health, so my initial assumption may have been wrong.

However, with indirect taxation, especially VAT at 20% and high fuel duties, and subtracting the contribution of things like corporation taxes to the tax base, the total tax paid vs the absolute "fair share" is likely to come pretty close for this family.

Sorry if this is boring but I was intrigued and thought I'd look into it! :-)

deelowe3• 14 years ago

If the american healthcare system is "free market," then I need to retake macro economics. It's such a regulated mess, I don't even know where to begin to point out the flaws in that statement. But, just as an example, I called to get standard billing rates for a specialist a few years ago and they said that patients weren't allowed to receive that information. Free market my arse.

dialtone• 14 years ago

Your sentence is strangely ironic... You want a completely free market without regulations and yet you are complaining that a company doesn't give out standard billing rates.

The idea of the non-regulated free market is that you'd choose with your wallet by going for another health care provider that tells you the billing rates.

If you want to force companies to reveal standard rates you are adding regulation. So is regulation needed or not?

Not even Adam Smith argued for a free market without regulation... He himself even identified several pain points and warned against "laissez-faire" economy.

jws• 14 years ago

The original title was useful. Changing a descriptive title to a useless phrase is disrespectful of the HN reader's time.

nsns• 14 years ago

...and probably killed this thread.

I wonder why its done, there's no reason for it.

SteveJS• 14 years ago

Was it originally the same title as in the html?: <title>The Surprising Truths About Income Inequality in America: Big Issues: GQ</title>

rprasad10• 14 years ago

Some of the mods must have moved over from Wikipedia or StackExchange. This title-changing/article-killing nonsense wasn't a problem until a few weeks ago.

funkeemonk3• 14 years ago

Considering how much the US has spent and is still spending on the military for the wars in Afghanistan and Iraq, I don't quite get the perception that taxing the rich more would fix anything. The bucket is leaking like crazy at the bottom and the solution is to pour more water? It may be fairer, but will it produce that much benefit, especially when compared to how difficult it would be to make this change? Is this tax-the-rich issue a red herring?

How much more money would end up in Uncle Sam's coffers anyway if the richer are taxed more?

ams61104• 14 years ago

This is my main feeling as well. Why does everyone think that taking more money from "the rich" and giving it to the government is going to have better results for society than just letting the rich spend it as they please?

sxp• 14 years ago

Because taxes have given us public schools, public infrastructure, and other public services. While all of these could be done better by the private sector in theory, there is no evidence that it will happen in practice.

sp3323• 14 years ago

Since just a few percent of the US population make 40%+ of the money in a given year, increasing taxes on those relatively few people would have more effect than taxing any other group of citizens. Also, since their effective tax rate is actually lower than most peoples', bringing their tax rate into line with the rest of the country seems like a no-brainer way to increase tax revenues substantially.

yummyfajitas22• 14 years ago

Also, since their effective tax rate is actually lower than most peoples'...

No. The people with the highest incomes already pay a disproportionately high portion of their income in taxes, far more than the poor or middle class.

Bringing their tax payments into line with the rest of the country would cause them to pay a lot less in taxes than they do now.

http://taxfoundation.org/article/new-data-top-1-pay-greater-...

funkeemonk3• 14 years ago

I'm hopelessly naive about taxes in the US (I'm not from the US). How much more money (in dollars) are we talking about here?

OpieCunningham2• 14 years ago

Tax the rich and we'll see how long until they use their considerable political power to move the gov't away from war spending. Don't tax the rich and then why should they care how much the gov't puts into war spending? It's basically free.

_delirium5• 14 years ago

I hope that if I ever find myself making $625,000 per week, I'll be a bit happier with my life, and less angry about poor people getting too much, than this Wayne fellow is.

juddlyon• 14 years ago

But those damn bus workers on stress leave are ruining the country!

funkeemonk3• 14 years ago

And with that, I understand why the rich are secretive about their wealth. It's ok if you're poor and pissed about the rich, but if you're rich and pissed about the poor, lose all your friends. Collect $200M as you pass Go.

_delirium5• 14 years ago

That might be part of it, though I think a bigger part is worry about friends/acquaintances interacting with you in a less-than-honest way once they know you're rich.

The asymmetry makes some sense to me, though. A poor person may or may not be justified in where they direct their anger, but I can see why they're unhappy. If you've got a lot of money, it seems strange to be actually angry about wealth distribution. I could see intellectually opposing various kinds of economic policies, but I mean, in the meantime, you still have a pretty good life.

Tobu3• 14 years ago

I was really worried at this guy managing to be so poorly educated for the power he has (see: his SuperPAC contributions). I know this was a long time ago and he is old now, but he must have interacted with a lot of poorer people, especially when he had to earn money to pay for college, some of whom must have been generous in their own way. It takes a high level of magical thinking to think he was the only one to give the kind of selfless help that Dr. Hudson's Secret Journal recommends.

OpieCunningham2• 14 years ago

How selfless is it when you consider it the critical, deciding factor in your own success.

taylonr3• 14 years ago

I'm not sure that if the author tried to write an article that did nothing but reinforce stereo-types he could have done a better job of doing so.

I read that article and I don't think anything in the article surprised me.

Immigrant working for next to nothing? Check. Middle class family living paycheck to paycheck in middle america? Check. Millionaire who drops 100k for a business manager? Check. Dot.Com millionaire who takes everyone he can on his private jet? Check "Self-Made Man" who doesn't want to pay more taxes? Check.

Tobu3• 14 years ago

There's a lot more detail than that. The way the lower-class people were paid (prepaid cards!) and how they budgeted were interesting to me; the details and evolution of the healthcare costs in particular were eye-opening. I'd have appreciated similar detail for the richer ones, but it would take a lot more virtual ink I suppose.

taylonr3• 14 years ago

"The details and evolution of healthcare costs in particular were eye-opening"

How long have you been working? I ask out of curiosity, because I've been working for the past 12 years as a software developer. For the last 8 years if I didn't change jobs or get a promotion there was only 1 time that my raise out-paced the insurance increases.

The fact that the lowest paid guy got paid via pre-paid debit card is only surprising because I assumed it was cash under the table. I know that in central Missouri that if you work construction it's common practice to pay you in cash for the first 2 weeks because too many people don't stay on for two weeks. As a result employers see it as too expensive to fill out all the paperwork etc.

I guess I just thought most (if not all) of this was common knowledge, and I'm in a upper-middle bracket and come from an upper-middle class family, so it's not like I "came up from welfare" and saw all this first hand.

However, I assume that the stories of these family run a lot deeper. I just kept thinking "Is it really news that a dishwasher gets taken advantage of and lives in a scary neighborhood?"

encoderer2• 14 years ago

My wife and I are fortunate. We're not wealthy by our standards, but I do recognize that we certainly would be considered wealthy by a lot of Americans. Our household income is about 4-5x the national average, and we have no children.

My understanding of the stats informs me that our household income puts us in the top 2.5%. Certainly a very blessed situation to be in, and one that we both work very hard to achieve.

But here's the striking truth about wealth distribution in our country...

The power-law-ish distribution of our wealth means that quantitatively, as a percentile, I'm much closer to the "1%" than I am to the "50%". But qualitatively, the struggles I face -- saving for retirement, knowing that if I had a serious illness our cash flow would dry up, etc -- my life is nothing like the "1%".

Another way to put it... I'm near the very top of the small pile of wealth shared by normal Americans.

I'm having a hard time properly articulating this but I think you get the point. It's almost as if, by percentile, you'd think "wow, I really have earned a big slice of this pie" only to find out that more than half the pie was taken by 0.5% of Americans before it was ever put on the shelf to cool. That until you're invited to take a sliver from that first half, you'll never get more than crumbs of the share that's split 298.5 Million ways.

muhfuhkuh2• 14 years ago

"knowing that if I had a serious illness our cash flow would dry up"

I will never in my life understand how Americans (myself included) can think this is, in any way possible, okay.

Or, how, if we just moved it more toward private companies having more control over our healthcare than they already do, that it'll get better. It's asinine.

encoderer2• 14 years ago

I didn't mean that as a commentary on our healthcare system. I mean that my income would be reduced to whatever level our long-term disability insurance provides.

Since you mentioned it, though: for people that are well-off in this country, the healthcare system works fine (more or less). That's probably a large source of the complacency. For both my wife and I, our health insurance plans are very good. They are paid 100% for us. They include a 10% co-insurance but a relatively low out of pocket cap.

arjunnarayan2• 14 years ago

I intend to migrate to Canada soon. Maybe one day this problem will be solved by the "free market" between nations --- through people voting with their feet at this unacceptable situation. I'm not holding my breath...

jimduey• 14 years ago

On that great universal healthcare system in the UK, http://www.telegraph.co.uk/health/elderhealth/9362183/NHS-fa...

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