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Re: This is truly scary.
Old 04-24-2007, 08:01 AM   #41
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Re: This is truly scary.

Listen, if the company is making the kinds of profits that let someone take in $28k a minute (or even a lot less), they can afford profit-sharing. If they're making that much money, then the employees are absolutely helping the company make more than you claim. Plus, that theory is a bit skewed on other fronts as well. You can't tell me that teachers, for example, lack the skills and that their jobs are so unimportant that they deserve to be paid so much less than other people with similar levels of education. And don't talk about the "summers off." Most teachers I know either work second jobs to make ends meet, or they are back in school to maintain their certifications and/or gain their masters' degrees. And these days, most teachers are back in the job market within five years, looking for better employment. Which means our kids are getting short shrift, being taught by youngsters without much experience, and the rare exception, those who feel so called to it that they're willing to sacrifice.

And the sad fact is, "the norm" is not as advantaged as you might think. A person with average intelligence, average skillsets, just needs to run into one problem - a health issue, for example - and suddenly he's unemployed or underemployed. If you look at the stats, "average" income is not very much.

I have another friend who's worked 20 years for a mining company as a legal secretary, makes $30k, and for the last decade has had to work a 2nd job to afford anything beyond the mean necessities. After 20 years of her life, the company will give her a whopping $900 a month in retirement benefits - until she gets SSI. Then it drops quite a bit. And the company recently sued current retirees to force them to agree to let the company quit paying its share for health insurance. Had she known that the company was going to pull that, she would've gone and done something else. But she's got 2 years to retire - at this point, she's pretty much stuck with whatever they'll spare her, because it's too late to start over somewhere else. You might say she should've quit some time ago and found better employment, but like so many, she has disadvantages that keep her from doing that. She has some health issues that make it tough to insure her, and a lot of companies won't even hire people like that.

What I think is amazing is that I have friends who have less education than she has, who were fortunate to stumble into jobs with companies that care more about their employees, and these people seem to think that they somehow earned the better deal, and by implication that she deserves to get stiffed.

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Re: This is truly scary.
Old 04-24-2007, 08:05 AM   #42
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Re: This is truly scary.

Quote:
Originally Posted by LKH
Thanks, donheff, for the clarification! That's a good question. Like you, I don't believe God works that way.
I better provide my bona fides so you won't think I am back sliding in some other thread - I am not actually a believer. But I do like a lot of aspects of Christian beliefs. It does seem, though, that some of the traditional beliefs (even the original Southern Baptist tradition) are being supplanted by fundamentalists who are more attuned to Old Testament retribution and apocalyptic visions than the Gospels.

By the way, a lot of people have read Dawkin's God Delusion recently which may explain the overtly hostile posts. But that discussion probably belongs in another thread - and might really drive you away.
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Re: This is truly scary.
Old 04-24-2007, 08:09 AM   #43
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Re: This is truly scary.

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Originally Posted by lets-retire
The problem with that line of thinking is once someone like Trump hits the magic ceiling why should he risk more of his money only to have the profit taken away.
I'm not quite sure what to think about the growing concentration of wealth in the USA today. The top 1% now control 38% of the wealth and that percentage is growing quickly since the mid-70's. (http://multinationalmonitor.org/mm20...iewswolff.html)

I'm really not for government controls, but I can't help but wonder what life will be like for the diminishing middle class if the trend continues and the top 1% controls, say 50% or 70% or more of the wealth.

Are you proposing to eliminate the progressive income tax system, the minimum wage and other existing economic factors we have today to make our economy and wealth accumulation truly laissez faire?

If they are able to do so under today's tax structure and business regulations, would you be comfortable with the top 1% controlling 90% of our aggregate wealth? If not, where do you draw the line?

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Re: This is truly scary.
Old 04-24-2007, 08:16 AM   #44
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Re: This is truly scary.

Hi, Youbet!

That's the problem I see. When that top few percent also controls how things are done, it's just a little too easy for them to scrape more profits off the scalps of people who are barely making ends meet. Some folks think the only alternative is pure communism, but nobody here is arguing for that. Just a little more fair play. It's unfortunate that human nature is such that some folks will have to be pushed to share a little of the joy with the people who help them earn it. But there it is.

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Re: This is truly scary.
Old 04-24-2007, 08:19 AM   #45
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Re: This is truly scary.

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Originally Posted by LKH
I wouldn't want to live in a pure communist state. But I do believe that we need to make it a little easier for the people who don't have all the advantages to make a decent living, ....
OK, let's have a proposal from you. What *would* you do?

And careful, there can be a fine line between 'helping people that don't have all the advantages' and removing some incentives to do more with what you have. The law of unintended consequences often comes into play in these well meaning programs.

And, FYI, here is how it 'works' now. Despite popular impression, the 'wealthy' *do* pay a very high percentage of the taxes. In the example you gave, that family would most likely pay zero federal taxes. Yes, they would pay FICA. FICA is a regressive tax (which is at odds with the progressive income tax system). I don't recall hearing the Dems talk about reform in the FICA area. I'm not sure why? Eliminating (or partially eliminating) the cap and putting in a threshold would seem do-able, and a boost to low income individuals.

-ERD50

http://www.ustreas.gov/offices/tax-policy/fact-sheet/
Quote:
In 2002 the latest year of available data:

# the top 5 percent of taxpayers paid over one-half of all individual income

# The top 1 percent of taxpayers paid over one-third of all individual income taxes.

# Moreover, since 1990 this group’s tax share has grown faster than their income share.

# Taxpayers who rank in the top 50 percent of taxpayers by income (in all years since 1990) have paid over 94 percent of all individual income taxes. In 2000, 2001, and 2002, this group paid over 96 percent of the total.

# In 2005, says the Treasury, when most of the tax cut provisions are fully in effect (e.g., lower tax rates, the $1,000 child credit, marriage penalty relief), the projected tax share for lower-income taxpayers will fall, while the tax share for higher-income taxpayers will rise.

# The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.

# The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.

# The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent as compared to a 13 percent decline for taxpayers in the top 1 percent.
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Re: This is truly scary.
Old 04-24-2007, 08:35 AM   #46
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Re: This is truly scary.

So, it looks like the percentage of taxes paid is more or less in line with the percentage of wealth controlled........ OK.

But even with those that control the wealth paying a proportionate share of the taxes, would you be comfortable if the current trend continues and the top 1%'s share increases from 38% to 70%? 80% 90%?

I'm not sure what to think. Again, I'm not a big fan of government controls, but that kind of wealth concentration led to some pretty nasty social upheavals in the past......even if the percentage of taxes paid was proportionate to the wealth controlled, as it seems to be today.
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Re: This is truly scary.
Old 04-24-2007, 08:50 AM   #47
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Re: This is truly scary.

Quote:
Originally Posted by youbet
.... if the current trend continues and the top 1%'s share increases from 38% to 70%? 80% 90%?

I'm not sure what to think. Again, I'm not a big fan of government controls, but that kind of wealth concentration led to some pretty nasty social upheavals in the past......even if the percentage of taxes paid was proportionate to the wealth controlled, as it seems to be today.
'If the current trend continues' is a big IF. Things usually tend to regress to the mean.

So that report states that the top 5% control about 60% of the wealth. I guess I'm not surprised. The majority of people are probably the average 'worker bee' types, a few percent at the bottom will be incapable or unmotivated, and only the top few percent are the exceptionally smart, creative, aggressive, risk-taking types that build new businesses and create wealth (and jobs for the 'worker bee' types). Luck (good and bad) will come into play, and drive some people above or below their capabilities. So it seems reasonable to me that 5% end up controlling 60% of the wealth.

Come to think of it, maybe the 5% that are capable of obtaining (and holding onto) wealth are *exactly* the people that *should* be in control of it!

-ERD50
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Re: This is truly scary.
Old 04-24-2007, 09:00 AM   #48
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Re: This is truly scary.

So, you're comfortable with the current trend and have no problem with the top 1% controlling, say, 90% of the wealth?
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Re: This is truly scary.
Old 04-24-2007, 09:18 AM   #49
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Re: This is truly scary.

LKH--The last time I checked many of Trump's companies were in New York and New Jersey. Don't they have unions? If they felt the Donald was not paying a fair wage they would be striking and making him pay more. As it is, normally, union employees are paid more than the non-union workers. So you are arguing that he is not paying a fair wage, but I don't see the unions backing you up. Teachers are a different animal. Most are not subject to the free market they are normally government workers. Anything in government employ is hard to compare. Using your argument Police and Fire workers need to be paid several tens of thousands more than they are. A lot of police officers have at least a four year degree, work year round, make less than a teacher, and still have to take part time jobs to make ends meet. My point is they are government workers, like teachers and their pay is not all that. I never said the norm was advantaged, what I said is the normal person is what needs to be looked at not the handicapped, if you are going to make large statements about the working class. If someone of average intelligence is not making above minimum wage after a few years then the person has a problem not the employer (actually the employer probably has a problem worker). Sorry to say but your friends problem of not moving to a better paying job is not very relevant to the discussion. I could bring up the fact that even after obtaining a four year degree and working in an industry for 15 years I make $20,000 less than my wife, who has no education past high school and has only worked in her field for 9 years. A lot has to do with the pay provided by the industry. Your friend chose a career path that as my mother-in-law (also a legal secretary) described as being a glorified secretary. Secretaries do not make a lot of money, they never have and they never will.

youbet--If the wealth of the nation is being controlled by a few people then it is the fault of the people not government. Although I do seem to recall some laws against anti-competition practices of companies. I would think that if to much of the wealth of the nation is controlled by too few people it would run afoul of the anti-competition laws. I do not have a problem with progressive taxes per say. When you start talking about capping the amount a person makes by instituting a 100% tax bracket, then I have a problem.
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Re: This is truly scary.
Old 04-24-2007, 09:27 AM   #50
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Re: This is truly scary.

Quote:
Originally Posted by youbet
So, you're comfortable with the current trend and have no problem with the top 1% controlling, say, 90% of the wealth?
Well, around the turn of the century, only 15-20 FAMILIES controlled 95% of the US wealth, so we're getting better.............
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Re: This is truly scary.
Old 04-24-2007, 09:36 AM   #51
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Re: This is truly scary.

Quote:
Originally Posted by lets-retire
If the wealth of the nation is being controlled by a few people then it is the fault of the people not government.
I'm not surprised to see you draw such a bold line differentiating between "the people" and "government."
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Re: This is truly scary.
Old 04-24-2007, 09:43 AM   #52
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Re: This is truly scary.

Quote:
Originally Posted by youbet
So, you're comfortable with the current trend and have no problem with the top 1% controlling, say, 90% of the wealth?

I very much doubt that will happen in the US.... look at some of the biggest companies today..

Microsoft... did not exist in the 70s... $280 billion

Google... did not exist in the 90s.... $148 billion

Wal-Mart... started by a guy that was not in the top 1% at the time... $200 billion..

My point is that the top 1% change over time... and the wealth is distributed in other ways...
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Re: This is truly scary.
Old 04-24-2007, 09:48 AM   #53
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Re: This is truly scary.

Quote:
Originally Posted by youbet
So, you're comfortable with the current trend and have no problem with the top 1% controlling, say, 90% of the wealth?
If I'm reading that report correctly (5% controlling 60% of wealth), we are a long, long way from 1% controlling 90%. But, yes, at a gut level, I think that could be a problem, as it would be out-of-whack with the income producing capability of those people.

And according to those tax stats, the top income earners are getting taxed at comparatively higher rates over the next few years, so this should slow the trend of wealth concentration, no?

Quote:
Originally Posted by [url]http://www.ustreas.gov/offices/tax-policy/fact-sheet/
[/url]
In 2005, when most of the tax cut provisions are fully in effect ....

• The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.

• The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.

• The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent as compared to a 13 percent decline for taxpayers in the top 1 percent.
I'm also curious - if we looked more closely at those numbers in your report, what would be the net worth of the lowest of that top 5%? I'm guessing that many of us FIRE'D people would be in that ballpark. I wonder if that would change people's views if it was *their* wealth that was being redistributed?

-ERD50



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Re: This is truly scary.
Old 04-24-2007, 10:03 AM   #54
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Re: This is truly scary.

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I very much doubt that will happen in the US.... look at some of the biggest companies today..
And I hope you're correct. For some reason, the subject has caught my interest and I've done some reading.......

The trend for wealth accumulation in the top 1% began to accelerate in the mid-70's and continues through today. Like you, I'm hopeful the trend will moderate without either extensive and intrusive government action or social unrest.

To the extent that the trend is caused by the smartest, hardest working folks taking risks and sometimes winning, I'm OK with it. But there does seems to be an unsettling trend towards concentrated wealth begetting barriers to entry and becoming self-perpetuating.

I guess we'll all learn how things work out as time goes by.......


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Re: This is truly scary.
Old 04-24-2007, 10:08 AM   #55
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Re: This is truly scary.

http://www.census.gov/prod/2003pubs/p70-88.pdf

This is rather old (from 2000), but it is the best I could find. On page 8 it starts with dividing the population into fifths. The top has a median net worth of only $186,000 including the value of the persons home. I think that puts many on this site in the top quintile as far as net worth.
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Re: This is truly scary.
Old 04-24-2007, 10:11 AM   #56
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Re: This is truly scary.

Quote:
Originally Posted by youbet
government action or social unrest
According to you wouldn't that be the same thing? Of the people, for the people, by the people.

I know I drew first blood.
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Re: This is truly scary.
Old 04-24-2007, 10:21 AM   #57
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Re: This is truly scary.

Quote:
Originally Posted by ERD50
If I'm reading that report correctly (5% controlling 60% of wealth), we are a long, long way from 1% controlling 90%. But, yes, at a gut level, I think that could be a problem, as it would be out-of-whack with the income producing capability of those people.
My personal concern is not so much over the top 5% as the top 1%. Those folks from 2% through 5% have been losing ground to the top 1%. I think of those 4% of folks is where the entrepreneurs, business starters, etc., stem from. They're loosing ground to the ultra-rich.
Quote:

And according to those tax stats, the top income earners are getting taxed at comparatively higher rates over the next few years, so this should slow the trend of wealth concentration, no?
I think you're reading those numbers incorrectly. They don't say that top income earners are getting taxed at comparatively higher rates. They say that top income earners will pay a higher share of the taxes. Of course. If there share of wealth ownership is rising, their share of total taxes paid will rise, all others things staying the same.
Quote:


I'm also curious - if we looked more closely at those numbers in your report, what would be the net worth of the lowest of that top 5%? I'm guessing that many of us FIRE'D people would be in that ballpark. I wonder if that would change people's views if it was *their* wealth that was being redistributed?
That's an interesting point of view. I'll try to find some of those figures. My gut feel is that few here would make it into the top 5%. Remember, the line is very steep at the top of the wealth distribution graph. The difference between being in the top 5% and the top 10% is huge.

Not trying to make a big deal out of this, and as eveyone is aware, I'm certainly not a person in favor of heavy government involvement or of government being involved in heavy handed distribution of wealth. But, I do wonder where this wealth concentration trend is headed and what will eventually cause it to moderate before that hypothetical 1%/90% number is reached.





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Re: This is truly scary.
Old 04-24-2007, 10:26 AM   #58
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Re: This is truly scary.

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According to you wouldn't that be the same thing? Of the people, for the people, by the people.
Historically, social unrest and government action have sometimes been intertwined. But, that's not according to me, it's just the way things have been......
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Re: This is truly scary.
Old 04-24-2007, 10:42 AM   #59
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Re: This is truly scary.

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Well, around the turn of the century, only 15-20 FAMILIES controlled 95% of the US wealth, so we're getting better.............
I'd like to read about that. Where did you find it?
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Re: This is truly scary.
Old 04-24-2007, 11:41 AM   #60
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Re: This is truly scary.

I finally stumbled across some data......

http://infoproc.blogspot.com/2006/03...net-worth.html

For households headed by a 50 yo, it takes about two million of financial assets (exclusive of your home) to be in the top 5% and eight million to be in the top 1% (2001 dollars). I'm too lazy to do the inflation adjustment to 2007 dollars, but, as is, not as high as I thought it was going to be. As I recall from a net worth survery someone ran here, and trying to do the inflation adjustment in my head, I bet we do have a number of members of the top 5% club right here!

For ERD50...... my interest is with percentage of total US wealth owned by the top 1%, not the top 5% as you seem to be interested in. The top 5% folks are probably still are in touch with the plebian masses. The top 1% folks, maybe not.......
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