25 Hedge Fund Managers Are Worth 680,000 Teachers

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Only partially true -- take some time out and do some in depth reading. I would suggest starting with Michael Hudson and Margrit Kennedy. Also, I think you really have to spend some time with "the crash course" -- of course you will have to temporarly put your ideological mindset on hold. Otherwise, the time spent may well be a useless expenditure.

I suppose in their world there are no bond "vigilantes" and the 70s never happened either. If you have a link to something he has written I might read it. I don't have time to sit through a you tube flash presentation.

Beware, my ideology includes things like comparing apples to apples and that percentages should add up, so you might be right about it being a waste of time.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

This is not the situation with the top quintile, the top 10% or the top 1%. Actually it appears that real income improved for the top 10%, while it delined for the bottom 90%

And in that time the effective tax burden of the bottom quintile fell in half while the others remand fairly constant.

This is a non sequitur. You are confusing the effects of inflation which benefit "the rich" disproportionately with tax policy.

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Again as I said the tax receipts of those years show that you are wrong on that -- in those years, capital gains were a much smaller part of income, and the definition of what constituted capital gains was different -- much more income derived from dividends, which were taxed as ordinary income.

Warren Buffet gets taxed mainly through capital gains tax -- which was broadened in its applications over the years.

Beginning in 1942, taxpayers could exclude 50 percent of capital gains on assets held at least six months or elect a 25 percent alternative tax rate if their ordinary tax rate exceeded 50 percent.[2] Capital gains tax rates were significantly increased in the 1969 and 1976 Tax Reform Acts.[2] In 1978, Congress reduced capital gains tax rates by eliminating the minimum tax on excluded gains and increasing the exclusion to 60 percent, thereby reducing the maximum rate to 28 percent.[2] The 1981 tax rate reductions further reduced capital gains rates to a maximum of 20 percent.

The Tax Reform Act of 1986 repealed the exclusion of long-term gains, raising the maximum rate to 28 percent (33 percent for taxpayers subject to phaseouts).[2] When the top ordinary tax rates were increased by the 1990 and 1993 budget acts, an alternative tax rate of 28 percent was provided.[2] Effective tax rates exceeded 28 percent for many high-income taxpayers, however, because of interactions with other tax provisions.[2] The new lower rates for 18-month and five-year assets were adopted in 1997 with the Taxpayer Relief Act of 1997.[2] In 2001, President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001, into law as part of a $1.35 trillion tax cut program.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Again as I said the tax receipts of those years show that you are wrong on that -- in those years, capital gains were a much smaller part of income, and the definition of what constituted capital gains was different -- much more income derived from dividends, which were taxed as ordinary income.

Warren Buffet gets taxed mainly through capital gains tax -- which was broadened in its applications over the years.

Your receipts show that someone paid some money at the top marginal rate. They tell you little about what they actually earned. Especially since a high tax bracket gave wealthy people an incentive to obscure that number.

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Yes and hence the siphoning of the wealth from the bottom 90% to the top 5%. Yes the inflation adjusted income of the top 5% increased, while that of the bottom 90% declined.

As for the bottom quintile, they paid no income taxes then, and they pay no income taxes now -- they paid less SS taxes then (9.9%) compared to now (12.4%)

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

There is always a limit to how much one can obscure - there is only so much cash one can store under the mattress.

Lowering the tax rates did not lead to less obscuring. It appears to have only increased it, and increased the access to tax havens.

Tax havens were not at all easily accesible in those years. Capital Flows across nations were much much more tightly regulated.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Yes and hence the siphoning of the wealth from the bottom 90% to the top 5%. Yes the inflation adjusted income of the top 5% increased, while that of the bottom 90% declined.

As for the bottom quintile, they paid no income taxes then, and they pay no income taxes now -- they paid less SS taxes then (9.9%) compared to now (12.4%)

Maybe I wasn't clear. The rich own things. When inflation causes these assets to rise they benefit from it by becoming wealthier. The rate, within limits, doesn't matter so much because the assets will mostly track with it. The poor have no assets and their wages are being depressed by global wage arbitrage and the advance of technology. So falling earning power of their wages puts them at a disadvantage, but this is not an artifact of tax policy.

[Kcim67]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

You are wasting your time Rajiv, although Radon appears to be well educated it is in that stubborn brand of neo classical economics that has been eagerly espoused and subsidised by the elitist educational organisations that also make up the plutocrats and financial institutions that have caused this mess in the first place.
The people of Kyrgyzstan this week to the tried old tested solution to those plutocratic leaders who appoint brothers, sisters, sons and daughters etc and basically abuse every privilege allowed to them, they ran them out of town and would probably have lopped of their heads given the chance. you are not telling me that wall street is any different and hopefully the end result will be the same, at present they don't even show that they feel there is any need for appeasement, they are far too arrogant for that. There day will come maybe not next year or the next ten but it will come!

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

I am talking of income adjusted for inflation. So your argument does not hold. Income adjusted for inflation of the top 5 % increased while the inflation adjusted income for the bottom 90% declined.

Read Michael Hudson - I am linking some good articles below

The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part I

The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part II

The New Road to Serfdom – An illustrated guide to the coming real estate collapse

The New Economic Archaeology of Debt

Margrit Kennedy's work is good as well

If money rules the world - who rules money?

A Changing Money System: The Economy of Ecology

Inflation and Interest-Free Money

[flintlock]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Growing corruption is an artifact of the centralization of power.

Allowing the government to expand rolls into social policies by increasing taxes only will only exacerbate this problem. We should be trying to starve the beast not feed it.

Smartest thing I've read on Itulip in quite a while. You obviously "get it". But we can't starve the beast until we get it out of bed with corporate America.

[ThePythonicCow]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

That is not true ...

Only partially true ...

If you could, Rajiv, please consider quoting a snippet of what you're responding to. When you don't, then only those readers who choose to follow the thread rather carefully are in a position to understand the context of your post.

Thanks.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

You are wasting your time Rajiv,

It depends on what he is trying to accomplish. I enjoy reading most of his news and I value his viewpoint even though I often disagree with it. This article on the other hand I'm not fond of for reasons which I have already stated.

although Radon appears to be well educated it is in that stubborn brand of neo classical economics that has been eagerly espoused and subsidised by the elitist educational organisations that also make up the plutocrats and financial institutions that have caused this mess in the first place.

I could be a fat 13 year old in her mothers basement typing away my fingers stained brown by twiglets, and so could anybody else on this blog for that matter. Just because two things happen doesn't mean one caused the other, and comparing outliers of one set to the median of anothers only use in this case is to produce a sensationalist headline. Recognizing obvious inconsistencies has nothing to do with education or economics. If not supporting logical fallacies and turning a blind eye to the misuses of statistics is elitist then I will happily subscribe to that label.

The people of Kyrgyzstan this week to the tried old tested solution to those plutocratic leaders who appoint brothers, sisters, sons and daughters etc and basically abuse every privilege allowed to them, they ran them out of town and would probably have lopped of their heads given the chance. you are not telling me that wall street is any different and hopefully the end result will be the same, at present they don't even show that they feel there is any need for appeasement, they are far too arrogant for that. There day will come maybe not next year or the next ten but it will come!

What on earth are you talking about? If your goal is to make everyone so poor that they revolt then you can see why I'm against it.

[ThePythonicCow]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Growing corruption is an artifact of the centralization of power.

Allowing the government to expand rolls into social policies by increasing taxes only will only exacerbate this problem. We should be trying to starve the beast not feed it.

You won't succeed trying to starve a clan of large black bears marauding your camp. You'll just annoy them more, and risk becoming bear food or bear cub toys. The only choices are to (1) take down the bears, (2) run away, (3) hide in the shadows and hope to be left unmolested, or (4) be taken down by the bears.

"Starving the beast" no longer works when the beast is too beastly.

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

If you could, Rajiv, please consider quoting a snippet of what you're responding to.

Not a problem. Will do. Since I always look at things in either a hybrid or threaded mode, it did not strike me that people are unaware of the threading.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

I am talking of income adjusted for inflation. So your argument does not hold. Income adjusted for inflation of the top 5 % increased while the inflation adjusted income for the bottom 90% declined.

Read Michael Hudson - I am linking some good articles below

The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part I

The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part II


The New Road to Serfdom – An illustrated guide to the coming real estate collapse

The New Economic Archaeology of Debt

Margrit Kennedy's work is good as well

If money rules the world - who rules money?

A Changing Money System: The Economy of Ecology

Inflation and Interest-Free Money

I'm not sure what you are saying. Are you implying that inflation does not benefit the rich? Anyway, let me look at the links.