richest 1% got 82% of the wealth

[flowerseverywhere]

https://www.oxfam.org/en/pressroom/pressreleases/2018-01-22/richest-1-percent-bagged-82-percent-wealth-created-last-year

Sobering press release from Oxfam. Perhaps one of the reasons so many people are part of the current great migration from the poorest countries in the world. And why in the richest countries in the world, there are So many without access to proper food, shelter, clean water, good public education, and proper healthcare. And women lag behind men in wages.

Read the whole article. 42 people in the world own as much wealth as the.entire bottom half of the worlds humanity. Let that sink in.

[LDAHL]

Of far more interest to me is whether global poverty has declined over the last generation or so.

[Alan]

Is the world's money supply static? If the article leads you to believe that every increment of wealth someone else owns diminishes your ability to prosper, then shame on the author.

[catherine]

Is the world's money supply static?

Of course not. The rich get richer in most cases.

Here is a really comprehensive look at global poverty (https://ourworldindata.org/extreme-poverty). It confirms what LDAHL said--in part due to the growth in Asia (China most specifically), global poverty is declining. Of course, that's good news. But if you are suggesting that there's some cause and effect between wealth inequality and increased prosperity--I would say that wealth inequality is something to be checked along the way to prosperity--like brakes on a train. Wealth inequality in my mind is a negative consequence of growth. What good does it do to have most of all the world's wealth tied up in the hands of a few people? So we can all be feudal serfs in a political world where the lords are those who can pay for power?

One of the conclusions of the report is:

Ending extreme poverty by 2030 is likely to require growth with declining inequality

[Williamsmith]

It would seem like the well being of the worlds population would be more complex than simple wealth comparisons can flesh out.

[catherine]

It would seem like the well being of the worlds population would be more complex than simple wealth comparisons can flesh out.

Very true... this report does go into that:

At Our World in Data, we believe that it is important to track progress in dimensions of well-being spanning beyond standard economic indicators. This is why we make an effort to study a wide range of aspects, including education, health, human rights, etc.

They admit that folding in all those variables makes comparisons across countries very difficult, but they tried. I see incredible limitations to GDP as a yardstick for prosperity and well-being, but we're living in that world right now, unfortunately.

[flowerseverywhere]

Is the world's money supply static? If the article leads you to believe that every increment of wealth someone else owns diminishes your ability to prosper, then shame on the author.

it depends. What if the richest few start a business (like Walmart and amazon for instance) and buys cheap goods produced with slave labor. I saw some shops in Thailand that had horrendous conditions where people went home to dirt huts and no running water. The same is true in many factories around the world. Goods that are sold in warehouses and stores where people work for minimum wage or slightly above with few benefits and stripped down health insurance. The rest of the businesses go out of business until you have left are big box stores and that staple of poor areas, dollar general. People making low wages have little recourse and fall further behind. There is a huge difference from bigger earners who can afford to put money in a 401k, enjoy having a decent vehicle to get to work, can afford decent childcare and health care, and those on the bottom of the scale. We travel the country for three or four months a year and see the same thing over and over. Extreme poverty clusters with no way out and extreme palm beach type wealth.

No good supermarkets? Let them eat cake. Expired Little debbies from dollar general.

[flowerseverywhere]

Thank you for this perspective


Of course not. The rich get richer in most cases.

Here is a really comprehensive look at global poverty (https://ourworldindata.org/extreme-poverty). It confirms what LDAHL said--in part due to the growth in Asia (China most specifically), global poverty is declining. Of course, that's good news. But if you are suggesting that there's some cause and effect between wealth inequality and increased prosperity--I would say that wealth inequality is something to be checked along the way to prosperity--like brakes on a train. Wealth inequality in my mind is a negative consequence of growth. What good does it do to have most of all the world's wealth tied up in the hands of a few people? So we can all be feudal serfs in a political world where the lords are those who can pay for power?

One of the conclusions of the report is:

Ending extreme poverty by 2030 is likely to require growth with declining inequality

[jp1]

it depends. What if the richest few start a business (like Walmart and amazon for instance) and buys cheap goods produced with slave labor. I saw some shops in Thailand that had horrendous conditions where people went home to dirt huts and no running water. The same is true in many factories around the world.

THis reminds me of an interview I heard recently of Sherod Brown where he spoke about the automobile factories in Mexico. Since Ohio has a lot of autoworkers (and factories) he has toured factories both in the US and Mexico. Basically, he said, automobile factories in Mexico are identical to those in the US in every way but one. They are all modern, high tech places that turn out excellently built cars. The only difference between them is that the Mexican ones don't have parking lots since the workers don't get paid enough to be able to afford the product they build.

[Rogar]

There are probably a lot of angles to consider, but my simplified take is that the wealthy control politics and governments. The mentality around wealth accumulation is geared to more wealth accumulation rather than sharing or wealth distribution. There are obvious exceptions of altruism, but it's a self-perpetuating system.

[dado potato]

I believe there will always be informed criticism of the distribution of wealth... to say nothing about griping about the inequity of one's own slice of the pie.

Globally, I see desperate migration, as well as populist (anti-elite) politicians. The populists all seem to say that "somebody must be blamed", but they differ over who should be the ones to blame.


Here is a link to a 1937 radio address by Father Charles Coughlin. By one estimate Father Coughlin had a following of 45 million listeners: "Somebody Must Be Blamed" http://www.historymatters.gmu.edu/d/5111

[Teacher Terry]

We also travel the world and some of the poverty we see is horrible. Some very wealthy people are pledging most of their money to charity like Buffet and Gates. Too bad more don’t follow suit.

[catherine]

We also travel the world and some of the poverty we see is horrible. Some very wealthy people are pledging most of their money to charity like Buffet and Gates. Too bad more don’t follow suit.

I have a lot of respect for Buffett and Gates. The Bill and Melinda Gates Foundation has done wonderful things. I see they have a new project: they have pledged 500M towards affordable housing in Seattle.

[LDAHL]

High concentrations of wealth are no doubt unhealthy for a society. Look at San Francisco.

But how healthy is it to empower the political class to decide how much of our wealth we can keep?

[Teacher Terry]

Tax high income people more like we did in the 60’s.

[JaneV2.0]

There's a Facebook group called Patriotic Millionaires that advocates higher tax rates and other progressive measures.

[Williamsmith]

It seems that our interest in taxing the wealthy somewhat stems from our inability to spend without creating more debt. I imagine a society where successful hard working citizens become wealthy without others coveting their wealth. I gaze out into the snow blanketed woodlands pondering the alternate universe that is a constitutionally limited republic rather than a democracy by majority rule. “Nurse, my meds please?”

[Teacher Terry]

As a society we have a responsibility to provide a decent education, healthcare and clean air and water for everyone. We also should take care of vulnerable people such as the elderly, disabled, etc. It benefits society as a whole to do so. When you have so much money that you cannot ever spend it all what’s wrong with contributing to the common good?

[Williamsmith]

As a society we have a responsibility to provide a decent education, healthcare and clean air and water for everyone. We also should take care of vulnerable people such as the elderly, disabled, etc. It benefits society as a whole to do so. When you have so much money that you cannot ever spend it all what’s wrong with contributing to the common good?

There is nothing wrong with contributions to benefit the less fortunate, of course. Where it gets a little sticky is who forces the voluntary contributions and by what means? And when a group finds itself standing in frigid water and decides to try to drain the lake instead of making their way to dry land, one must ask why.

[Rogar]

There is a group called "Americans for tax fairness" that presents some interesting figures. I think there are common misconceptions about income tax rates vs. effective tax rates. I've already forgotten the name of the wealthy politician who paid a lower effective tax rate than his secretary.

https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-taxing-wealthy-americans/

[flowerseverywhere]

There is a group called "Americans for tax fairness" that presents some interesting figures. I think there are common misconceptions about income tax rates vs. effective tax rates. I've already forgotten the name of the wealthy politician who paid a lower effective tax rate than his secretary.

https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-taxing-wealthy-americans/

Warren Buffet says he pays a lower tax rate than his secretary.

There is so so much waste even common people can see in our government, no wonder why our deficits are so big. It was not cheap for Melania to fly for the weekend in Mara Largo. Huge amounts are spent when presidents golf. They rent golf carts, fly down and so on. Advance teams to clear everything. One day in DC we happened to see Pence leaving his compound. There was a large police escort with multiple big black vehicles, motorcycle escorts, and the we have several times seen the presidential escort,around town, which is even bigger. Pelosi and pals to the Middle East? The gang going to Davos, and Pompeo jetting around in Washington DC. That would be enough to build a mile or two of a big beautiful concrete wall.

[iris lilies]

Warren Buffet says he pays a lower tax rate than his secretary.



You do understand they are taxed on different kinds of income, right? Or maybe the details dont matter to you.

I get the kind of income Warren gets, and so do you. Would you like to pay a higher tax percentage on that?

[flowerseverywhere]

You do understand they are taxed on different kinds of income, right? Or maybe the details dont matter to you.

I get the kind of income Warren gets, and so do you. Would you like to pay a higher tax percentage on that?

absolutely there is a difference. The richest of us have access to armies of attornies, tax loopholes, different tax structures and so on. Is it fair that Trump, while building a multi million dollar empire reportedly had many years federal tax free? Of course since we have never seen his tax returns who knows? Certainly the rich have a whole other way of doing business and paying or not paying taxes. Is it right? Is it fair? Obviously people have different opinions about it and it is doubtful anyone changes their minds on a forum like this.

[ApatheticNoMore]

There is nothing wrong with contributions to benefit the less fortunate, of course.

there is nothing wrong with it, but I doubt it's particularly sincere unless one has experienced at least some economic misfortune at some point in life themselves, how else to even know how to help the unfortunate (and to not start feeling superior rather than just luckier than them), but no doubt the homeless still need homes etc. etc. - but people shouldn't be going homeless etc. anyway.

[jp1]

You do understand they are taxed on different kinds of income, right? Or maybe the details dont matter to you.

I get the kind of income Warren gets, and so do you. Would you like to pay a higher tax percentage on that?

Oh yay. Now we can again go through the argument of whether people who work for a living should have lower tax rates or whether the saintly investor class should get lower tax rates on their unearned income. All the while ignoring the concept of marginal tax rates.

[Rogar]

It would make sense to me to tax returns on investments at the same progressive rate as other forms of income, like wages, interest income, pensions, etc.

[LDAHL]

there is nothing wrong with it, but I doubt it's particularly sincere unless one has experienced at least some economic misfortune at some point in life themselves, how else to even know how to help the unfortunate (and to not start feeling superior rather than just luckier than them), but no doubt the homeless still need homes etc. etc. - but people shouldn't be going homeless etc. anyway.

So you feel charity is somehow insincere or condescending unless it stems from motives you approve of? That you have to have experienced poverty to know how to alleviate poverty? You can’t empathize with a condition you haven’t lived?

If I haven’t been hungry or homeless, the time I have put into food banks and Habitat for Humanity was just an exercise in vanity?

[ApatheticNoMore]

Oh yay. Now we can again go through the argument of whether people who work for a living should have lower tax rates or whether the saintly investor class should get lower tax rates on their unearned income. All the while ignoring the concept of marginal tax rates.

marginal income tax rates on wages are progressive already, they could be more of course, and they could be less (if there was a flat tax I guess), and how much would that really do about wealth inequality anyway i wonder, some I guess.

[Teacher Terry]

I have seen people’s middle class lives go down the crapper when they get a disability and can’t work. I have seen people use their savings and lose their homes and sometimes their marriages due to the stress. I don’t need to experience it myself to know how horrible it is.

[Williamsmith]

Rather than focus on redistributing wealth I am in favor of Abolishing the IRS and replacing it with a simplified tax system which in part would eliminate tax shelters, loopholes, and all manner of taxable “income” manipulations that wealthier taxpayers who can afford to hire accountants and lawyers take advantage of. I would like to file my federal income tax on a postcard someday.

[bae]

I just want a good list of all the clever "loopholes" the rich use, as non of the fancy-schmancy tax lawyers I've ever hired seemed to be able to show me the Secret Sauce.

[Williamsmith]

With all due respect Bae, you should be hiring lawyers from the firm of Dewey, Cheatem and Howe.

[Rogar]

Rather than focus on redistributing wealth I am in favor of Abolishing the IRS and replacing it with a simplified tax system which in part would eliminate tax shelters, loopholes, and all manner of taxable “income” manipulations that wealthier taxpayers who can afford to hire accountants and lawyers take advantage of. I would like to file my federal income tax on a postcard someday.

I have liked that idea. It would be interesting for the bean counters to run the numbers and see how much revenue would be raised or what sort of deficits would occur. I suspect there might be rioting in the streets.

Income manipulations and loopholes they may be, but it's pretty much semantics and they are not reserved for just the rich. They are just the tax laws we have been given. I have been below what ever the median income level is for my area and probably the country for the last several years, but I take advantage of the tax laws and don't consider it income manipulation. During my working years I contributed to a "tax deferred" IRA. Much of which I've rolled over into a Roth IRA, which has further tax advantages. I own mutual funds which will be taxed at the going rate of capital gains when I sell. I try to take further advantage of my tax deferred accounts by keeping fixed income interest that would be taxed at a higher rate than capital gains in tax deferred accounts. No lawyer, it's just my money and I want to maximize my income and have tried to educate myself. Although a lawyer might do better.

I give money away to people who are doing good things and prefer that to giving to the government and the wasteful part of their spending and unnecessary military expenses. I live frugally and what ever is left after I'm gone will go to a good cause since my relatives are decently provided for. I know that my philosophy is probably different that people bent on large wealth accumulation, but there is also a common ground of wanting more control over where my money goes.

[jp1]

I just want a good list of all the clever "loopholes" the rich use, as non of the fancy-schmancy tax lawyers I've ever hired seemed to be able to show me the Secret Sauce.

I suspect that if your finances were as complicated as trump’s and you obtained tax advice from his tax advisors you would learn of plenty of clever loopholes.

[flowerseverywhere]

I just want a good list of all the clever "loopholes" the rich use, as non of the fancy-schmancy tax lawyers I've ever hired seemed to be able to show me the Secret Sauce.

Paul Manafort and Martha Stewart can probably give you some names, as well as Donald. And there is always Saul Goodman. He had great ideas for Walter White to launder money from illegal drug money.

Years ago DH and I both had jobs that required uniforms and work only shoes. We had a tax preparer tell us we should buy these items by the case, sell to our coworkers in cash, and deduct the working expenses. He was full of ridiculous suggestions. We were amazed at how stupid Someone must be to risk so much for so little. We knew someone years ago who bragged he had increased the number of dependents on his tax returns and no one ever checked. Is it out of the realm of possibility that many small businesses who get paid in cash don’t report every cent? And Swiss bank accounts and offshore accounts? All totally legal?

as Jesse Pinkman said, you don’t need a criminal lawyer you need a “criminal” lawyer.

[bae]

You are describing not "loopholes", but "criminal activity". Probably why my tax attorneys didn't come up with that.

[Tammy]

😄

[jp1]

We knew someone years ago who bragged he had increased the number of dependents on his tax returns and no one ever checked.

I remember reading somewhere that when the IRS started requiring people to put social security numbers of their dependents on their tax returns (back in the '80's I think) that the number of dependents claimed dropped by a noteworthy amount the following year. Makes one wonder how many cats and dogs had been listed as dependents previously.

[jp1]

Since I have steadfastly used a buy and hold strategy with my etrade account the vast majority of my income is from my job. Most of my investment income is unrealized at this point (I do own a few dividend and royalty paying investments that I inherited from my father but the income is only a few thousand per year). As such there's not much I can do to minimize my taxes. All my earnings get reported to the IRS so there's no wiggle room really.

A quick google search turned up this article: https://www.accounting-degree.org/accounting-tricks/ I personally would only use tax avoidance strategies that were considered to be absolutely above board, but I assume there are plenty of people willing to take advantage of ones that are in more of a gray area or even a downright black area if they determined that the likelihood of getting caught was low enough.

[iris lilies]

Let’s see, a subtext of this thread is that we are pure but others are dastardly.

in that vein, our tax preparer of 30+ years is pretty conservative because nothing has never been suggested to us that is weird although he did say some years ago man you guys need to find a way to reduce your tax liability. Since he is the guy who is supposed to suggest that stuff to us I didn’t really know where to turn and I pretty much ignored it. All that said, we were only in the, what is it, 25th Bracket. I think. I never really remember that but it wasn’t a high tax bracket we were in.


DH worked out of our house but we never claimed home office exemption because it just wasn’t worth it, we didnt have a mortgage so there wouldn’t have been much to claim and honestly we didn’t meet the rule anyway which is to have space in your house that is used solely for that business purpose. We saw one of our friends get clobbered with a tax obligation when she sold her giant house because she had been using three rooms on the second floor as her business. It was legitimately used by her because she saw patients in her therapy practice, and she had to have a treatment room, a waiting room, and then she and her husband shared an office. But man that was a lot of taxes she paid out when she sold it, tied to her tax claims of that space as business use.

[jp1]

No, it's not that I (and you) are pure and others are evil. It's that I (and you) would save pennies at best. The people that have the 82% of the wealth would save enough by gaming the system to make it worthwhile.

You (and I) are just not rich enough for tax shenanigans to be worth it. You've got to be half a billion dollars worth of tax shenanigans (like trump's family) rich to make it worth trying to play the game. So no, I'm not surprised that your husband didn't bother saving the few sheckels he might have saved with claiming the home office. Little people like you and me have to jump through too many hoops to make such a small deduction worthwhile. But for someone at the Walton or Koch level of wealth, playing those games actually makes a noticeable difference.

[Williamsmith]

The average earner shouldn’t have to hire a tax service at anywhere from $100 to several hundred just so they don’t inadvertently overlook a tax savings or a tax obligation. But many do. The IRS is a bloated government entity that has huge power just handed to it and as we have seen in the past gets used to harass and target US citizens. It’s the first alphabet soup agency that needs rid of. A flat tax that taxes money only at the time it is earned and not after investments, inheritance, etc would be ideal.

This plan to demonize wealthy people as a group, use the IRS to strip them of their property and redistribute the wealth among the more needy is folly. Too many hands, not any of the redistribution will get to anyone who could really use it. And many will be targeted unfairly and as usual the politically connected will escape scrutiny.

We cant make a moral system out of an immoral system. The root cause is overspending.

[iris lilies]

The average earner shouldn’t have to hire a tax service at anywhere from $100 to several hundred just so they don’t inadvertently overlook a tax savings or a tax obligation. But many do. The IRS is a bloated government entity that has huge power just handed to it and as we have seen in the past gets used to harass and target US citizens. It’s the first alphabet soup agency that needs rid of. A flat tax that taxes money only at the time it is earned and not after investments, inheritance, etc would be ideal.

This plan to demonize wealthy people as a group, use the IRS to strip them of their property and redistribute the wealth among the more needy is folly. Too many hands, not any of the redistribution will get to anyone who could really use it. And many will be targeted unfairly and as usual the politically connected will escape scrutiny.

We cant make a moral system out of an immoral system. The root cause is overspending.
yes to everything here, sing it brother!

[Lainey]

About half of federal revenue is from taxes on income. If the flat tax was instituted, not enough money would be generated and federal deficits would rise. Again. So our national debt and deficit would grow even more. Can't get on board with that.

Also wondering how scenarios like a postal carrier delivering mail to a trust fund baby lounging by the pool, and only one of those parties paying any income tax - what's the public relations term - how are those "optics" going to play out?

[Rogar]

About half of federal revenue is from taxes on income. If the flat tax was instituted, not enough money would be generated and federal deficits would rise. Again. So our national debt and deficit would grow even more. Can't get on board with that.

Wouldn't it depend on the rate of taxation and how much income tax revenues would increase without the common deductions to income and including the standard deductions?

A lot of our tax structure is intended to benefit a prospering economy. The lower capital gains tax rate encourages people to invest in the stock market. Mortgage interest deductions encourage home ownership. What ever is left of medical deductions and charitable contributions contribute to general social welfare.

It ain't going to happen in my lifetime, but I'm all for it. Let the chips of the free market fall where they may. I've actually talked about with my CPA who I pay a couple of hundred dollars a year to sort through my taxes and he's actually for it, although it would risk his employment.

[catherine]

Also wondering how scenarios like a postal carrier delivering mail to a trust fund baby lounging by the pool, and only one of those parties paying any income tax - what's the public relations term - how are those "optics" going to play out?

Lainey, from what I've read in some of these posts is that the postal carrier would be a whiney coveter of the trust fund baby's wealth. It's his problem if he's not happy with his station in life. Let him eat cake.

Certainly this is a philosophical argument. If you view society as extended family, you would say that helping one of us helps all of us. If you view society as a collection of rugged individuals, then you are likely to feel society functions best when directed by self-interest.

Speaking of everyday folk demonizing the wealthy, Ayn Rand used to demonize the "society as family" folks, making them one-sided cartoons in her books. I don't know why she felt such contempt for people in helping professions. When I'm told that raising issues with gross inequality means I'm just a whiner who is simply looking for a bigger piece of the American pie, that is not the right answer.

[jp1]

Does the mortgage interest deduction actually increase home ownership? Or does it just push up prices and amount to welfare for wealthier people?

https://www.aeaweb.org/research/mortgage-interest-tax-deduction-implications-housing-prices

[iris lilies]

About half of federal revenue is from taxes on income. If the flat tax was instituted, not enough money would be generated and federal deficits would rise. Again. So our national debt and deficit would grow even more. Can't get on board with that.

Also wondering how scenarios like a postal carrier delivering mail to a trust fund baby lounging by the pool, and only one of those parties paying any income tax - what's the public relations term - how are those "optics" going to play out?

I think the fantasy that the 1% or even the 5% will fund nirvana is equal to the fantasy that a flat tax will solve it all.

There are plenty of charts that show how much the 5% already pays in income taxes, the lion’s share. There isnt enough money in their income streams to solve our problems but let that not deter us from flogging them, the selfish bastards.

[Rogar]

Does the mortgage interest deduction actually increase home ownership? Or does it just push up prices and amount to welfare for wealthier people?

Exactly.

Although a switch to a flat tax without this exemption would probably crash the real estate market.

Then there's the exemptions for dependents.

[LDAHL]

Then there's the exemptions for dependents.

I thought they were eliminated in the new tax law.

[iris lilies]

Exactly.

Although a switch to a flat tax without this exemption would probably crash the real estate market.

Then there's the exemptions for dependents.

yes, likely the real estate industry as well as other disciplines would lobby against flat tax. But I have been waiting for the complaints from the real estate industry about Trump’s simplification of deductions, the jump from $6,000 to $12,000 per person and none have reached my ears. There are a lot of mortgages in the Midwest less than $1,000 monthly.

[LDAHL]

yes, likely the real estate industry as well as other disciplines would lobby against flat tax. But I have been waiting for the complaints from the real estate industry about Trump’s simplification of deductions, the jump from $6,000 to $12,000 per person and none have reached my ears. There are a lot of mortgages in the Midwest less than $1,000 monthly.

I would also have thought we’d be hearing more complaints about the limit on state and local tax deductibility, especially from the bluer, taxier states. It may be early days yet.

[LDAHL]

I see that in the scuffle to get to the left of her primary opponents, Sen Warren is proposing a tax on net worth for the unacceptably wealthy.

[Alan]

I see that in the scuffle to get to the left of her primary opponents, Sen Warren is proposing a tax on net worth for the unacceptably wealthy.She's probably just trying to protect folks from our 2nd most prominent elected democratic Socialist who has recently mused on the immorality of allowing billionaire's to exist.

[LDAHL]

She's probably just trying to protect folks from our 2nd most prominent elected democratic Socialist who has recently mused on the immorality of allowing billionaire's to exist.

just the tippy-top ones.