Are You A One Percenter

[DSpencer]

Re: Are You A One Percenter

Spencer, I am still flummoxed by your writings, you seem to be on a crusade.

I pointed out a hypocritical stance of Ayn Rand who advocated complete withdrawal of government out of "capitalism" and people's lives except to protect citizens from foreign invaders etc.

(A) Advocating that SS be ended does not equal (B) advocating that people turn down benefits from programs they are forced to support with taxes. If she did not do the opposite of what she advocated then she is not being hypocritical. That is my only point.

At some point the logic is irreducible. If you don't agree that A ≠ B then there isn't any point in discussing further.

The simple fact remains: there is only self interest, hers included.

She simply acted in her self interest to accept medicaid and SS, right? It would be ludicrous not to accept those benefits with which she paid into, right?

So she acted in her own self interest.

I don't disagree that she acted in her self interest. Does that prove she's being a hypocrite? If anything, given her philosophy, I would think the opposite.

[lektrode]

Re: Are You A One Percenter

Right back at you.
....
Like I said, you can slice and dice the numbers six ways to Sunday....
...
No matter how you cut it, it's arithmetically impossible for everyone in the US to be in the global 1%.

oh YES, dc - you CAN slice em and dice em (and metalman's comment a few weeks ago was absolutely right-on-the-money about both u2 = The Best)

but on sunday ?
;)

[dcarrigg]

Re: Are You A One Percenter

That's a flagrant misuse of demographics. While the use of demographic information is important in such discussions, one must be careful to use them appropriately. I do not suspect that there are 7.1 billion income earners on this planet. Arithmetic, incorrectly applied, can say a lot of nonsense.

Right back at you.

By restricting the inquiry to income earners you leave out the entirety of the capitalist class, business income, the retired living off cap gains, big farmers/ranchers, 401(k)s, pensions, or Social Security, all the trustafarian children, all children generally, fellowships/honoraria/awards, rich college kids, trophy wives, housewives, stay at home daddies, Jed Clampett and the people who cashed in big off shale gas leases on hay land, and almost anyone else that actually lives like the top 1%.

Like I said, you can slice and dice the numbers six ways to Sunday.

In the end of the day, the US is ~4.5% of the world's population. And I'd venture to guess that even if you insist on restricting the inquiry to wage earners, the US would have more than 4.5% of the world's wage earners.

No matter how you cut it, it's arithmetically impossible for everyone in the US to be in the global 1%.

[Ghent12]

Re: Are You A One Percenter

Yea, too bad the 100% of Americans don't live in China (earning 38k or more) with their overall lower cost of living, education, housing, food so on and so on.

That statement is a fallacy.

Our incomes are based off of US standards and prices not Chinese, not Russian, not Ethiopian.

That's not a fully accurate summation of the comparison. America is simply a far better place to live than the People's Republic, the Russian Federation, or the Ethiopian whatever, even when comparing nominal incomes. The 1% income comparison still has some relevance when used globally. Likewise, it has meaning when making comparisons through time--we are all unfathomably wealthy in a material sense compared to our ancestors.

That's a little tough in some ways. Do you measure raw GDP? Or GDP at PPP? The later's probably a better estimate. Do you control for currency? There is a lot of manipulation that can go on with a stat like that.

In the end of the day, a quick little bit of math will show that it's impossible that everyone in America is part of the global 1%. 1% of 7.1 billion is 71 million. There are 316 million people here. So even if the entirety of the global 1% was in the USA (it's not), we couldn't all be a part of it. There are another 742 million in Europe, and lots of them make wages pretty close to the US. In fact, Europe + US + Canada + Australia/New Zealand etc. probably makes up about 15% or so of world population. And that's not counting the rich in third world countries.

By definition, only 71 million people can be part of the "global 1%." That's just simple math. We're not all in it. There's no way. Arithmetic says it's impossible. BCG says there's 16.3 million millionaires in the world. They're probably in it. But it's hard to know where the other 55 million fall in. This WaPost article says that only the 92nd percentile of Americans are in the global 1% (top 8%). BLS puts top 8% at about $2,000 per week, which would put the figure at about $104,000 if the WaPost article is right.

But, like I said, it all depends. Is it just labor, or labor + capital gains? We're talking income and not wealth, right? Households or individuals? Only wage earners, or families? Are we counting pensions? Yatta yatta yatta.

In the end of the day, only 71 million people can be in the 'top 1%' according to whatever definition you find. And at best a little less than half of them will be right here in the good old US of A. Figuring out how to slice and dice the number until it makes sense is complicated. But 8% of us sounds about right to me.

That's a flagrant misuse of demographics. While the use of demographic information is important in such discussions, one must be careful to use them appropriately. I do not suspect that there are 7.1 billion income earners on this planet. Arithmetic, incorrectly applied, can say a lot of nonsense.

[Thailandnotes]

Re: Are You A One Percenter

Why are there 7 brackets from $0 to $300,000 and no brackets above that? Work out the amount later.

Bingo!

Also...

If you are married filing jointly, and
you have no income beyond 72,000 in long term capital gains,
your federal tax is zero.

What's the rational?

[dcarrigg]

Re: Are You A One Percenter

When I say loophole, I don't mean to imply something that exists by accident. Maybe a better term would be "carve-out" or special interest exemption or something like that.

Saying that inequality leads to growth is not the same as saying growth leads to inequality. Nor is it the same as saying that attempts to fix inequality will stifle growth.

What do you think is a fair top bracket? Personally, I just find it distasteful to think that people's income should be taxed at a rate where most of what they make is used for taxes. When you add in state and local taxes we are basically at the point already depending on where you live.

It's not a carve-out, though. Capital gains are taxed lower than income form work. It's part of the fundamental design of the system.

If you are saying that growth leads to inequality, you're empirically wrong. Actually, if there's one incontrovertible thing that's worth taking out of Picketty's data, it's that historically, when growth is high - higher than the return on capital - inequality decreases. I mean, if growth meant an increase in inequality then the 1950s never happened.

And that's kind of the fundamental problem with aiming an entire economy and tax system to try to create "growth" out of finance, isn't it?

It's sort of my whole problem with the libertarian analysis. Everything's the state's fault. Nothing's the private sector's fault. Bankers and billionaires deserve to be taxed less because the state is evil.

But in the end of the day, evil doesn't care whether your paycheck is signed by the Secretary of the Treasury or the CFO. Evil's in people. Public sector, private sector, they've all got their faults. Markets are a tool, not a panacea. States too are a tool, not a panacea. Placing 100% of your faith in one and despising the other is insane to me. In the end, they are creations by, of, and for man.

What do I think is a fair top bracket? I'm more concerned with how many brackets there are. Why are there 7 brackets from $0 to $300,000 and no brackets above that? Work out the amount later. The key thing is that we acknowledge that if we're going to agree to have a progressive tax system, it makes no sense to exempt the million plus per year folk from progressive brackets and lump them in with the upper middle class folk.

[santafe2]

Re: Are You A One Percenter

My emphasis on necessary, rather than objectively, was deliberate. I understand that it can never be fully objective, but did hope to drive in that direction. The important part was: "is increasing inequality necessary?"

I would certainly agree that some degree of inequality is inevitable, and am readily willing to concede that it may be necessary for growth. I do, however, question whether increasing inequality can be linked to increasing growth. I think this is extraordinarily doubtful but I am open to hearing convincing arguments. In that spirit, let's explore further:

I maintain that a better model (meaning more consistent with current understanding of human psychology) is a threshold model: Once a person sees inequality of sufficient amount to motivate them to do their honest best to improve their lot, any further inequality is simply excess, and perhaps even, as dcarrigg describes, destructive.

I don't want to wade into the macro argument here as I think others have covered the various positions rather well. I've owned several businesses in my life and what I've found is that the long term success of a small to mid-size business requires measured inequality to ensure the business can retain the best employees possible. Benefits of success, both long term and short term, have to be shared. But that model is not required in multi-national businesses where the differential between the top and bottom is several orders of magnitude and there exists no sense of community. As for growth, it can apparently be accomplished with either model and many others in between but we do have to decide what type of society we want.

If we're happy with the spoils of business moving mostly to the few, the 1% model exhibited by Walmart then that is the direction we should continue to move. If we think a more socialized approach will work better for us, we should move in that direction. Clearly the US population is still deciding whether we want a Roosevelt/Johnson social model or the newer Reagan/Bush social model. Personally, I lean toward a more socialized model but we’ll see which direction the US moves over the next 50 years.

[astonas]

Re: Are You A One Percenter

First off, I want to thank you both, dcarrigg and DSpencer, for steering a conversation that could easily have become very uncivil indeed, back toward civility. I am benefitting greatly from it.

I do try although I have often failed. Most of the uncivil conversations quickly become uninteresting and unhelpful.

We have all failed often enough, and I certainly claim no exception. But if enough try, I think the difference is noteworthy, and the results should be appreciated and recognized. Thanks again.

1) Has it been objectively established that increasing inequality is a necessary side effect of economic growth?

I doubt that such a thing could ever be objectively proved to everyone's satisfaction. I do think it's logical to think some degree of inequality is inevitable. I would say there's also historical evidence that trying to enforce greater equality has, at least in some cases, hurt economic growth.

My emphasis on necessary, rather than objectively, was deliberate. I understand that it can never be fully objective, but did hope to drive in that direction. The important part was: "is increasing inequality necessary?"

I would certainly agree that some degree of inequality is inevitable, and am readily willing to concede that it may be necessary for growth. I do, however, question whether increasing inequality can be linked to increasing growth. I think this is extraordinarily doubtful but I am open to hearing convincing arguments. In that spirit, let's explore further:

I maintain that a better model (meaning more consistent with current understanding of human psychology) is a threshold model: Once a person sees inequality of sufficient amount to motivate them to do their honest best to improve their lot, any further inequality is simply excess, and perhaps even, as dcarrigg describes, destructive.

It is conceivable that greed can motivate a person to go to more extreme measures (theft, fraud, etc.) but I genuinely can't imagine why seeing trillionaires in a society is more motivating for honest effort than seeing billionaires, or indeed millionaires. Perhaps it is my imagination that is limited. Could you explain why increasing inequality beyond the current point makes sense, in terms of providing additional motivation for people to succeed? Alternatively, could you explain how the level of inequality that is currently present motivates economic activity better than the (lesser) inequality that was seen in this nation twenty years ago? Are people really more motivated today?

I'd also like to point out that while there have certainly been some spectacular failures in terms of eliminating inequality completely (eg. fall of the Soviet Union under communism) there have also been some fairly compelling cases where inequality has been structurally suppressed in moderation, with what is broadly considered impressive success (eg. the social market systems of Scandinavia and parts of northwestern Europe, the German Wirtshaftswunder, etc.).

2) If ever-increasing inequality is a necessary consequence of growth (presumably measured by GDP) has it been established that a growing GDP is really the most desirable metric for measuring the success of a group of people, such as a nation? Desired by whom?

Obviously a matter of opinion. I would say no, but finding other objective metrics is hard.

I concur with you that it does not make sense to pursue growth, if the gains are to be concentrated in a few, and the vast majority experience a loss.

The reason for my placing the emphasis on the second part of the question (Desired by whom?) was to underline why I align with dcarrigg in his main thesis, so far as I understand it. The very assumption that total growth is the best metric for success of a nation, is already sufficient (along with free-market policies) to siphon wealth upward in ever-increasing amounts, and is therefore always desired by the rentier. (Other segments of society accept the metric as given, largely in ignorance of the damage it is doing them.) I believe that is why, in his words, "the game is rigged."

The argument that a "more free" market is the solution is thus ignoring the entire cause of the fraud, in the same way that the proverbial fish has no name for the water it swims in. The bias is so intrinsic, and ubiquitous, that it is invisible. A more free market may well produce more headline growth. But that alone does not make it good, either for a nation, or in the long run, any of its inhabitants. Even the topmost tiers of a society cannot thrive if the nation they live in degrades to a point of destruction.

An alternative metric to GDP is not so hard to find, Gross National Happiness is one example. There is even one nation that has already embraced this as its official metric for evaluating performance.

3) Which of the following is more responsible for the abuses you cite?:
(a) the existence of taxes and regulations whose initial purpose was to fund basic services and create a fair playing field.
(b) the corruption of those same taxes and regulations by lobbying efforts of interested parties to provide market advantages for themselves.

I'm not sure I exactly understand the question. I think that many taxes and regulations were never intended to create a level playing field. In fact many were intended to create the opposite. Take the special protections provided for the US sugar industry through import tariffs. Was that ever intended to create a fair playing field or fund basic services? Not in my mind.

I guess I would pick B, but really I blame the politicians whose job is supposed to be maintaining a level playing field, not picking winners and losers based on lobbying.

The reason I posed the question as a dichotomy, which I agree is highly imperfect, is that this is the false breakdown that our current system is forcing.

One may reasonably answer (a) if one believes that all taxes and regulations must be (a priori) inherently and irreparably flawed, to an unacceptable extent. The only solution would then be to shrink all taxes and regulation.

One may reasonably answer (b) if one believes that there is a better way to implement taxes and regulations, and that we just haven't implemented that yet here. One solution is to improve the quality of governance, rather than focussing on the amount of governance.

The problem, really, is when voters confuse the two parts of the problem, or throw their hands up in despair of ever seeing better governance, and ask simply for less of it [thus implicitly choosing (a)]. In that case, they are probably going to get the exact opposite of what they want.

The reason is simple. All those loopholes are defined in relief. In the negative. "We will tax this whole industry (but with these exceptions)." "We will regulate that whole industry, but with these loopholes." I agree that the intent was often not a noble one. But the phrasing, and structure, of the bills (laws), present it as such anyway.

So when you go to close an exception, that action is correctly classified as "raising taxes". When you go to close a loophole, you meets howls of "increasing regulations" because -- technically, it is. The lobbyists wrote these bills well. They knew that to get them passed, they would have to be defensible to voters.

And they did so. They worded them in a way that when people get upset at the unfairness, and demand "less regulation" from their representatives, what they actually will get is worse regulation. When people demand "lower taxes" from politicians, what they wind up with is resistance to eliminating tax breaks for a few.

The legal wording has been deliberately constructed so that any attempt to simplify the argument into an easy slogan, will provide the lobbyists with the win they need. And so the voters who fall for the slogans, play right into the hands of those they are mad at.

The only answer is for voters to resist the facile simplification. Don't demand less regulation, but better regulation (which may require too much detailed knowledge for the average voter, but not, I think, the average iTulip'er). Don't demand lower taxes, demand fairer taxes. Again, specific knowledge of what this entails for a given bill will be required, but I certainly don't think this is beyond the present reader's grasp.

In short, I think there is a better way. And I think that giving up on that is exactly what those who create corruption want us to do.

That's how they win.

[aaron]

Re: Are You A One Percenter

This is another one of those articles telling the sheeple how good they have it and we should STFU and be grateful.

We have fallen so far when we compare ourselves to peasants in China, starving Africans, etc. Yeah, our shit sandwich tastes better than there's. However, we used to have beef patties for breakfast, lunch and dinner.

The country is broken and will continue its decline until 95% of the population is eating cat food. At which point we will brag about how good our cat food is compared to Monrovia's.

[dcarrigg]

Re: Are You A One Percenter

That's a little tough in some ways. Do you measure raw GDP? Or GDP at PPP? The later's probably a better estimate. Do you control for currency? There is a lot of manipulation that can go on with a stat like that.

In the end of the day, a quick little bit of math will show that it's impossible that everyone in America is part of the global 1%. 1% of 7.1 billion is 71 million. There are 316 million people here. So even if the entirety of the global 1% was in the USA (it's not), we couldn't all be a part of it. There are another 742 million in Europe, and lots of them make wages pretty close to the US. In fact, Europe + US + Canada + Australia/New Zealand etc. probably makes up about 15% or so of world population. And that's not counting the rich in third world countries.

By definition, only 71 million people can be part of the "global 1%." That's just simple math. We're not all in it. There's no way. Arithmetic says it's impossible. BCG says there's 16.3 million millionaires in the world. They're probably in it. But it's hard to know where the other 55 million fall in. This WaPost article says that only the 92nd percentile of Americans are in the global 1% (top 8%). BLS puts top 8% at about $2,000 per week, which would put the figure at about $104,000 if the WaPost article is right.

But, like I said, it all depends. Is it just labor, or labor + capital gains? We're talking income and not wealth, right? Households or individuals? Only wage earners, or families? Are we counting pensions? Yatta yatta yatta.

In the end of the day, only 71 million people can be in the 'top 1%' according to whatever definition you find. And at best a little less than half of them will be right here in the good old US of A. Figuring out how to slice and dice the number until it makes sense is complicated. But 8% of us sounds about right to me.

[LorenS]

Re: Are You A One Percenter

Yea, too bad the 100% of Americans don't live in China (earning 38k or more) with their overall lower cost of living, education, housing, food so on and so on.

That statement is a fallacy.

Our incomes are based off of US standards and prices not Chinese, not Russian, not Ethiopian.

So help me out here, what is the $$ point at which someone is better off than 99% of the global population?

[dcarrigg]

Re: Are You A One Percenter

Show me where she preaches that individuals should not accept SS benefits even if they were forced to pay in and I will accept that she is being hypocritical. Saying that the system should abolished is not the same thing.

I just think it's ludicrous to suggest that if someone disagrees with a government program that they should be forced to endure the negative aspects while purposefully avoiding the positive ones because otherwise they are a hypocrite. If the whole program were voluntarily it would be a different scenario.

I used an extreme example to show the absurdity. But honestly, this is everyday life. Sometimes you don't get your way and you go with the flow. It doesn't mean you've changed your mind or sacrificed all your principles. What you advocate didn't happen and so you accept the status quo because you have limited control.

If you vote against a school levy that passes do you have to home school your kids or move districts because otherwise you'd be reaping the benefits of a tax you oppose, even though you also pay it?

If you say a private fire department would be superior to the public one in your town do you have to let your house burn to the ground even though your taxes helped pay for the public truck that arrives?

If you tell your town to build a library instead of a park but they don't listen are you a hypocrite if you have a picnic at the park that your tax dollars built?

FWIW, you have an argument for SS, but not so much for Medicare/Medicaid. She made all her money before those programs even existed - they were what? '65 LBJ? She stumped for Goldwater and against those programs in the mid sixties as part of her last real political actions before becoming somewhat ill, insofar as I recall. She died in what? 82? She was diagnosed with cancer and took benefits starting when? mid 70s? There's no way she didn't get considerably more than whatever she paid in on that one.

What I'm saying is she's already somewhere in her 50s when the first Medicare taxes kick in. Why didn't she have a medical nest-egg set up in the name of individual responsibility? Had she been born a decade prior, or had her man Goldwater won, in all likelihood the government benefits she used as a crutch would not have existed at all. What then?

If the goddess of personal responsibility and wealth couldn't save enough even with a series of best selling books to pay 1970s medical bills for one bout of cancer, even though she spent her prime earning years with a big incentive to do so since no Medicare/Medicaid existed, how are the rest of us mere middle class mortals supposed to do it with 2010s prices?

[ProdigyofZen]

Re: Are You A One Percenter

The upper 1% world wide is the equivalent of $38,000 per year household income. If your household makes more than that you are a 1% er.

Yea, too bad the 100% of Americans don't live in China (earning 38k or more) with their overall lower cost of living, education, housing, food so on and so on.

That statement is a fallacy.

Our incomes are based off of US standards and prices not Chinese, not Russian, not Ethiopian.

[ProdigyofZen]

Re: Are You A One Percenter

Show me where she preaches that individuals should not accept SS benefits even if they were forced to pay in and I will accept that she is being hypocritical. Saying that the system should abolished is not the same thing.

I just think it's ludicrous to suggest that if someone disagrees with a government program that they should be forced to endure the negative aspects while purposefully avoiding the positive ones because otherwise they are a hypocrite. If the whole program were voluntarily it would be a different scenario.

I used an extreme example to show the absurdity. But honestly, this is everyday life. Sometimes you don't get your way and you go with the flow. It doesn't mean you've changed your mind or sacrificed all your principles. What you advocate didn't happen and so you accept the status quo because you have limited control.

If you vote against a school levy that passes do you have to home school your kids or move districts because otherwise you'd be reaping the benefits of a tax you oppose, even though you also pay it?

If you say a private fire department would be superior to the public one in your town do you have to let your house burn to the ground even though your taxes helped pay for the public truck that arrives?

If you tell your town to build a library instead of a park but they don't listen are you a hypocrite if you have a picnic at the park that your tax dollars built?

Spencer, I am still flummoxed by your writings, you seem to be on a crusade.

I pointed out a hypocritical stance of Ayn Rand who advocated complete withdrawal of government out of "capitalism" and people's lives except to protect citizens from foreign invaders etc.

That is all I did.

I gave no other judgment on her writings or life.

The simple fact remains: there is only self interest, hers included.

She simply acted in her self interest to accept medicaid and SS, right? It would be ludicrous not to accept those benefits with which she paid into, right?

So she acted in her own self interest.

Anyway here is the counter argument supporting my point from Debate.org:

1. the idiom; Put your money where your mouth is.
Remember the quote, “There can be no compromise on basic principles. There can be no compromise on moral issues. There can be no compromise on matters of knowledge, of truth, of rational conviction*.” ~Ayn Rand
Well Ayn Rand had the choice to put her money where her mouth was and she clearly didn't. That's where critics go "Ahah! Got You". So how is it complete nonsense if the logic of the "Ahah!" was put your money where your mouth was? If Ayn Rand was committed to her ideals like what my opponent states, then she would've followed through with her philosophy.

2. Receiving government aid through secrecy
Lets take issue with the secrecy that Ayn Rand took to receive Social Security and Medicare benefits which she strongly condemned. In the Washington post article it states, "An interview with Evva Pryror, a social worker and consultant to Miss Rand’s law firm of Ernst, Cane, Gitlin and Winick verified that on Miss Rand’s behalf she secured Rand’s Social Security and Medicare payments which Ayn received under the name of Ann O’Connor (husband Frank O’Connor). As Pryor said, “Doctors cost a lot more money than books earn and she could be totally wiped out” without the aid of these two government programs. Ayn took the bail out even though Ayn “despised government interference and felt that people should and could live independently… She didn’t feel that an individual should take help.” But alas she did and said it was wrong for everyone else to do so. Apart from the strong implication that those who take the help are morally weak, it is also a philosophic point that such help dulls the will to work, to save and government assistance is said to dull the entrepreneurial spirit." (http://www.huffingtonpost.com...)
If she truly felt that her actions weren't hypocritical wouldn't you think she would have said so when she was alive?

3. World is not a vaccuum
My opponent is right the world is not a vaccuum, but Ayn Rand's choices ultimately forced her to violate her philosophy. She was a heavy smoker who did not believe smoking caused lung cancer, and was eventually afflicted by lung cancer in an ironic twist. She knew that the costs of doctors for lung cancer treatment were more than her earnings from her books, and she was faced with a choice of bending her philosophy or sticking through with it. Considering how she was already accustomed to violating her philosophy by paying her taxes "reluctantly" to fund government programs that she was disdainful of, the choice may have been easy.

4. Give and take necessity
My opponent states, "Ayn Rand was against taxes, but would pay them when she had to (or face the harsh consequences), and Ayn Rand was against government assistance, but accepted it when handed to her (or face the senseless hardships faced by paying taxes AND not getting anything out of it)."

The argument may seem compelling, but her taxes were used by the federal government in defense, medicare, social security, infrastructure, education, and other programs like with any other citizen's taxes. Her taxes were used to fund part of the nuclear weapons arsenal of the US to deter the Soviet Union during the Cold War, fund NASA's programs, and build new roads, city buildings. Her taxes were used to provide safe consumer goods, and fund the education of the Nation's future. If that wasn't hypocritical to Rand's philosophy then I don't know what is, since she clearly got a lot indirectly or directly from paying her taxes.(http://www.wheredidmytaxdollarsgo.com...)

The resolution is a clearly a put your money where your mouth is debate, and Ayn Rand clearly failed...

[LorenS]

Re: Are You A One Percenter

The upper 1% world wide is the equivalent of $38,000 per year household income. If your household makes more than that you are a 1% er.

Aside from bribery and theft, if someone has a huge amount of money I don't really care.

I am not saying she didn't produce good work, values and concepts with Objectivism etc but when you make a stance, an extremely strong stance and statement that she made throughout her entire life then switch that stance to accept SS and Medicaid (no matter if she "paid" into it or not) then continued to preach to the plebeians to not accept government handouts then I find that hypocritical.

I have no problem with people collecting from SS the same amount they paid in plus a small amount to account for the interest that money would have earned in the bank.

From a purely libertarian point of view SS payments are merely the tardy repayment of stolen (forcefully borrowed?) funds.