Wealth disparity and taxes

[Bikewer]

Listening to an NPR segment yesterday on growing income dispartiy in the US, they pointed out that in terms adjusted for inflation, most low-to-middle income wages have not risen since 1969.
In fact, workers now earn slightly less than they did back then....

They then profiled two different CEOs of Dean dairy products, a nationwide and sucessful firm. As little as ten years ago, the CEO was earning one million dollars per year. He turned down a proposed raise; indicating he was making a good wage for his services and had a nice home, investments, and was a member of a country club.

The current CEO of the same corporation makes 10 million per year. He has memberships in four country clubs, "properties" in a number of different cities, and a yacht.

Now this post isn't about corporate executive salaries; that's been discussed to death and I know the industry line on same.
Rather, it's that the fellow above is the one that the Republicans have drawn their line in the sand over. He's the guy they want to shield from any sort of tax increase.
Even though the "increase" merely means going back to the amount of tax paid prior to the Bush tax cuts.
I imagine that our thrifty CEO might well wish to drop his membership in one of those country clubs if the tax cuts were allowed to expire....
Any number of pundits have stated that doing nothing more than allowing the Bush tax cuts to expire would essentially straighten out the deficit within ten years.
No cuts in spending, nothing. Just let the tax cuts expire.
Rather than this, republicans are apparently willing to let us slide into default.

I know it's an ideological battle, but it sure appears to this peon that the Republicans are quite willing to attack the deficit by eating the poor rather than making the assorted Gottrocks of the country go back to a pre-Bush tax level.

 

[Dancing David]

My take is that capital gains are income, when the property/whatever is sold therefore taxes should be paid.

 

[eeyore1954]

Any number of pundits have stated that doing nothing more than allowing the Bush tax cuts to expire would essentially straighten out the deficit within ten years.
No cuts in spending, nothing. Just let the tax cuts expire.
Rather than this, republicans are apparently willing to let us slide into default.

Assuming that is a true statement you are aware that letting the Bush cuts expire "essentially straightens out the deficit within ten years" means all of the cuts. The lions share of the relief to the deficit would be from the expiring lower rates for those who are not "rich".
I want you to find me democrats or republicans who are willing to let the cuts expire.

 

[WildCat]

I don't think CEO pay has anything to do with tax rates. It's the inevitable result of an incestuous corporate board culture that has developed over the years. Board members don't seem to realize any more they're supposed to represent shareholders.

You want to rein in CEO pay? Enact reforms on corporate boards, completely overhaul how they are selected and limit them to one board position at a time.

 

[eeyore1954]

I don't think CEO pay has anything to do with tax rates. It's the inevitable result of an incestuous corporate board culture that has developed over the years. Board members don't seem to realize any more they're supposed to represent shareholders.

You want to rein in CEO pay? Enact reforms on corporate boards, completely overhaul how they are selected and limit them to one board position at a time.

Why don't the shareholders, such as large funds , pensions, etc complain about CEO pay.

In this particulare case most of his yearly compensation is from stock gains.

 

[Dancing David]

I don't think CEO pay has anything to do with tax rates. It's the inevitable result of an incestuous corporate board culture that has developed over the years. Board members don't seem to realize any more they're supposed to represent shareholders.

You want to rein in CEO pay? Enact reforms on corporate boards, completely overhaul how they are selected and limit them to one board position at a time.

Yay!!!!!!!!!

 

[Alt+F4]

Why don't the shareholders, such as large funds , pensions, etc complain about CEO pay.

Because as long as the share price goes up they don't care what the CEO's salary is. Muhtar Kent, the CEO of Coca-Cola made over $24 million in 2010.

 

[WildCat]

Why don't the shareholders, such as large funds , pensions, etc complain about CEO pay.

Because small shareholders feel powerless against the large shareholders, and they are. People owning mutual funds don't even know what stocks they own.

The large shareholders are probably on several company boards themselves, and are buddies with the CEOs they are supposed to check. Many corporate board members are walking conflcts of interest.

If you followed the Blago trial part of what he did was pressure businesses to put his wife on a corporate board.

 

[Bikewer]

As I said, not about CEO pay but rather the Republican "no tax" position.

I geta healthy refund each year; I'd gladly take a tax hike If it were across the board and applied usefully.

 

[Dumb All Over]

Any number of pundits have stated that doing nothing more than allowing the Bush tax cuts to expire would essentially straighten out the deficit within ten years.

I'm sure there are just as many pundits who would disagree with this.

 

[lomiller]

My take is that capital gains are income, when the property/whatever is sold therefore taxes should be paid.

I agree with the caveat that selling one investment to buy another is not really income and should not be taxed as income.

 

[Dancing David]

I'm sure there are just as many pundits who would disagree with this.

Ah yes, but remember when GWB said 'this budget will start to reduce the debt in 2015"?

It was not because of the tax cuts but because of their twilight.

 

[mhaze]

I agree with the caveat that selling one investment to buy another is not really income and should not be taxed as income.

This is already coded in the law as 1031 (and some other styles) of "like kind exchanges", however, it has serious flaws.

For example, someone might for good reason want to sell one inverstment and get into another which wasn't "like kind". There is no reason to tax him on the occurrence of this event, but not if it was "like kind". The key issue here is whether reinvestment (which is good for the economy) occurred or did not occur.

I've argued against the 1031 exchange in many cases, since there is nothing wrong with "taking the tax hit now"...particularly if you think it will be higher later. Generally, low taxes on capital gains (now they are I think half of ordinary income) benefit the average person, as well as small businessmen and the wealthy.

In fact, it wouldn't be dumb to raise ordinary taxes and reduce capital gains taxes by a corresponding amount. but some would call that "taxing the working class". Except that those high dollar capital gains transactions are the lifeblood of the economy, so what you can do to get more of them going is definitely a good thing.

 

[Puppycow]

I know it's an ideological battle, but it sure appears to this peon that the Republicans are quite willing to attack the deficit by eating the poor rather than making the assorted Gottrocks of the country go back to a pre-Bush tax level.

A recent case in point is Orrin Hatch.

Republicans like to make a big deal of the fact that rich people pay most of the taxes, while poor people do not.

However, it's still true that the rich are getting richer a lot faster than the rest of the country, and wealth gaps are widening.

 

[Teemu]

Listening to an NPR segment yesterday on growing income dispartiy in the US, they pointed out that in terms adjusted for inflation, most low-to-middle income wages have not risen since 1969.
In fact, workers now earn slightly less than they did back then....

The poorer you are, the higher the effect of rise of oil price is on you, and as you can see, the oil price chart was nicely boring for several decades before 1970es.

I know it's an ideological battle, but it sure appears to this peon that the Republicans are quite willing to attack the deficit by eating the poor rather than making the assorted Gottrocks of the country go back to a pre-Bush tax level.

82% of the Bush taxs were into "middle class" tax brackets. No mainstream Democrat Congressmen want to touch the brackets below $250k either.