The 9.9% - The New American Aristocracy - Atlantic Article

[Red Badger]

Like Marko, I can be empathy deficient. I do what I can as a vol in my community. I damn sure don't want the government "making us more equal." That approach has caused millions to die and impoverished billions. No F-ing thanks.

Besides....

https://www.economist.com/international/2017/03/30/the-world-has-made-great-progress-in-eradicating-extreme-poverty

 

[daylatedollarshort]

And when was that? 150 years ago?

 

[Winemaker]

And when was that? 150 years ago?

I'm gonna be lambasted again for bringing politics/history in on a subject but here goes. Most of the "wealthy" countries were/are countries that allowed personal property rights to their citizens. Those citizens were able to work their own land, grow the crops they wanted, sell their land to others, and mortgage their land in order to take advantage of other opportunities. In the poorer countries, the kings, queens, dictators or tyrants, owned the land and the serfs/ peasants/minions had no incentive to go above and beyond, because it would be confiscated by the land owner. The poorest countries on Earth are the countries that restrict/limit private property, because of their system of government.

The US, is the richest country in the world, because in some cases, the Government gave the land away to it citizens. The lands along the railroads were given away so they could be developed. Even today, I can strike a claim on federal lands, and obtain ownership under the most cheapest terms. (However, the cost of regulation trying to get a mining permit these days would have you go insane.)

 

[NW-Bound]

Hmm - It's a great day here in Kansas City.

I'm surprised no one on this long thread has mentioned 'Budda'. The 1% guy who walked out of the place and the rest they say is history.

heh heh heh - no idea where 'that' brain phart came from but I had to add some more to this very long thread.

You mean the following Siddharta, the prince who left his palace to become a wandering ascetic and achieved enlightenment while meditating under a ficus tree? He was at least in the 1/1,000,000 or 0.0001%.

I don't think too many modern-day billionaires would walk out of their mansions or yachts to lead an ascetic life. I would not, and I am not even a decamillionaire. Would you?

PS. I prefer to close my eyes to think about the meaning of life in the comfort of A/C, while holding in hand a glass of icy cold gin and tonic.

PPS. Make it Bombay Sapphire Gin, please. The only gin for me. Thank you.

 

[daylatedollarshort]

I didn't see the article as guilting the top 10% for their lifestyles - just a reminder to be grateful to some of us who may have had head starts in life and have empathy for those who had a taller ladder to climb to get to the top.

 

[marko]

I'll finish my comments with this:
All this talk about the 'evil' rich overlooks the fact that either through their own selfishness or benevolence they've brought some great things to the masses.

The Romans were the ultimate bad-guy 01%ers but look at the architecture, order and civilization they brought to the world.
The DeMedici's had their own issues but where would be be without Venice, Florence, the art and sophistication they gave us.
Throughout the ages, there were wealthy 01%ers who sponsored the likes of DaVinci, Michelangelo, Voltaire, Newton, Brae, Copernicus, on and on.
Today we have Bill and Melinda Gates among countless others, many anonymous.
"This PBS program is brought to you through a generous gift of the X family foundation" (who the heck are they?)
Virtually every hospital and museum you visit has some wealthy benefactor's name on the wall who dropped a few million to help build it.
In my neck of the woods we have the Peter Lynch (ex Fidelity) family who've donated mega-millions to the betterment of the locals here.

Some comments here sound as if the rich just sit on their yachts drinking martinis dreaming up ways to further oppress the poor and line their pockets. Are all these people flawed? Surely. Is every 01%er a philanthropist? No. But for all the flaws there are many who've contributed greatly to our lives, civilization and made the world a better place.

Sorry. IMO it's not a binary good/evil struggle; we have to live in the grey areas of the world.

 

[NW-Bound]

... Some comments here sound as if the rich just sit on their yachts drinking martinis dreaming up ways to further oppress the poor and line their pockets...

Hey, I was the one who said I liked to sit around in air-conditioned comfort with my gin.

Do I have to feel guilty for that, after spending as much as 0.5% WR out of my 3.5% WR for gifts and donations?

I don't even belong in the 0.1%, for crying out loud. What is that level, anyway? I will not begrudge someone who enjoys his gin on a yacht, which I can only read about and see photos of.

PS. I just found out. In 2005, the top 0.1% had annual income exceeding $1.6M.

 

[FI FELLOW]

I'll finish my comments with this:
All this talk about the 'evil' rich overlooks the fact that either through their own selfishness or benevolence they've brought some great things to the masses.

The Romans were the ultimate bad-guy 01%ers but look at the architecture, order and civilization they brought to the world.
The DeMedici's had their own issues but where would be be without Venice, Florence, the art and sophistication they gave us.
Throughout the ages, there were wealthy 01%ers who sponsored the likes of DaVinci, Michelangelo, Voltaire, Newton, Brae, Copernicus, on and on.
Today we have Bill and Melinda Gates among countless others, many anonymous.
"This PBS program is brought to you through a generous gift of the X family foundation" (who the heck are they?)
Virtually every hospital and museum you visit has some wealthy benefactor's name on the wall who dropped a few million to help build it.
In my neck of the woods we have the Peter Lynch (ex Fidelity) family who've donated mega-millions to the betterment of the locals here.

Some comments here sound as if the rich just sit on their yachts drinking martinis dreaming up ways to further oppress the poor and line their pockets. Are all these people flawed? Surely. Is every 01%er a philanthropist? No. But for all the flaws there are many who've contributed greatly to our lives, civilization and made the world a better place.

What have the Romans ever done for us!

https://youtu.be/Y7tvauOJMHo

 

[mpeirce]

Another solution is to keep all those goods and just return to prior tax rates...

I expect we'll also get back to all those really slick tax loopholes, deductions, and tax shelters. Unless you bring those back, you're not really comparing apples to oranges.

 

[CardsFan]

When it comes to thread wandering, this one is a stand-out. In a few short posts it went from a proposed change in RMDs to the Mayflower, the Constitution, and revolution. There’s some real creative minds and elastic thinking here.

The above is from a different thread but is applicable here.

Rant On:
Some folks here should read the story of the Mayflower and the Mayflower Compact. In the beginning, they tried a "collective" arrangement, didn't work. Then they apportioned land and made everyone responsible for their own, still providing for those that could not do it. That worked. And that is what we have today.

From Here, talking about the Forbes 400 richest Americans: https://www.forbes.com/sites/kerrya...ear-for-americas-richest-people/#508df62460b7

"At 269, list members with self-made fortunes vastly outnumber those who inherited wealth (64 members), and those who inherited a fortune and have worked significantly to increase it --what Forbes calls “inherited and growing” (67 members)."

So 67% of the current richest 400 Americans have made their Fortune in ONE generation.

And, for the most part, these folks are give away more money than we could ever think of taking by taxing.

IMHO, "we" have idenified a "problem" without need for a solution.

Rant over.

 

[marko]

So 67% of the current richest 400 Americans have made their Fortune in ONE generation.

And, for the most part, these folks are give away more money than we could ever think of taking by taxing.

IMHO, "we" have idenified a "problem" without need for a solution.

Rant over.

+100

 

[Amethyst]

That's true of news reporting, which this is not. Sometimes the Atlantic does excellent reporting, but this is more of an editorial. An editorial that doesn't propose some course of action, even if it's high-level and not too specific, is a cop-out. It amounts to "Things are bad; Something Must Be Done."

Reporters and media don’t solve problems, they draw attention to them. It’s up to us to acknowledge, understand, accept, and if we agree, remedy.

 

[Cut-Throat]

+100

I'm pretty sure that everyone that is posting on this thread did not read the entire article, and that is why this thread is wandering. And most of the people here on this forum are very happy with their financial position in life (including myself)... And that is precisely what the article is about. And there are a lot of people patting themselves on the back for how successful and hard working they are. (The article mentions that also)



If you are happy with a lot of poor, maybe destitute people running around, you have not thought through how this could play out. I'm sure that the upper 10% were pretty happy in the early part of the depression, until their stocks tanked about 90%. And things could get uglier than that. (Think French Revolution).

 

[daylatedollarshort]

"At 269, list members with self-made fortunes vastly outnumber those who inherited wealth (64 members), and those who inherited a fortune and have worked significantly to increase it --what Forbes calls “inherited and growing” (67 members)."

So 67% of the current richest 400 Americans have made their Fortune in ONE generation.

Some of those wealthy individuals, like Bill Gates and Warren Buffett, think the ultra wealthy should pay more in taxes...." Expand the earned income tax credit, which benefits people with low incomes. Even though “that probably means more taxes for guys like me,” Buffet said, “I’m fine with it.”

Fellow billionaire Bill Gates has made similar comments. “There’s no doubt that what we want government to do in terms of better education and better health care means that we need to collect more in taxes, ” he said during a recent conversation in New York City. “And there’s no doubt that as we raise taxes, we can have most of that additional money come from those who are better off.” Source: https://www.cnbc.com/2019/02/25/warren-buffett-and-bill-gates-the-rich-should-pay-higher-taxes.html

 

[CardsFan]

I'm pretty sure that everyone that is posting on this thread did not read the entire article, and that is why this thread is wandering. And most of the people here on this forum are very happy with their financial position in life (including myself)... And that is precisely what the article is about. And there are a lot of people patting themselves on the back for how successful and hard working they are. (The article mentions that also)



If you are happy with a lot of poor, maybe destitute people running around, you have not thought through how this could play out. I'm sure that the upper 10% were pretty happy in the early part of the depression, until their stocks tanked about 90%. And things could get uglier than that. (Think French Revolution).

The article is quite long, and I admit to not reading it in its entirety, though I am sure some here did.

If there are points to made that we missed, please post a quote that we can discuss.

To me, when I start reading an article with the "attitude" that, "I am rich, but I am not worthy, and neither are you" my eyes tend to glaze over.

If there is something I missed, please enlighten me.

 

[foxfirev5]

I'm pretty sure that everyone that is posting on this thread did not read the entire article, and that is why this thread is wandering. And most of the people here on this forum are very happy with their financial position in life (including myself)... And that is precisely what the article is about. And there are a lot of people patting themselves on the back for how successful and hard working they are. (The article mentions that also)



If you are happy with a lot of poor, maybe destitute people running around, you have not thought through how this could play out. I'm sure that the upper 10% were pretty happy in the early part of the depression, until their stocks tanked about 90%. And things could get uglier than that. (Think French Revolution).

Yep. Even I learned in a tough public grade school that you never want to find yourself up against someone with nothing to lose.

 

[RobbieB]

I never understood the vitriol against taxes. Taxes here are low. I never minded paying taxes either, if I paid a lot of tax I made a lot of dough.

I'd rather live large and pay tax than budget myself by "brackets"

 

[CardsFan]

Some of those wealthy individuals, like Bill Gates and Warren Buffett, think the ultra wealthy should pay more in taxes...." Expand the earned income tax credit, which benefits people with low incomes. Even though “that probably means more taxes for guys like me,” Buffet said, “I’m fine with it.”

Fellow billionaire Bill Gates has made similar comments. “There’s no doubt that what we want government to do in terms of better education and better health care means that we need to collect more in taxes, ” he said during a recent conversation in New York City. “And there’s no doubt that as we raise taxes, we can have most of that additional money come from those who are better off.” Source: https://www.cnbc.com/2019/02/25/warren-buffett-and-bill-gates-the-rich-should-pay-higher-taxes.html

That all sounds great, except for the fact that these folks can (and do) control their "income" in ways folks here at ER.org can only imagine. If they feel that guilty, send a check for a few billion. They don't, because they get more applause for complaining.

So the other option is to tax "wealth". Not a slippery slope I want to go down.

 

[NW-Bound]

I'm pretty sure that everyone that is posting on this thread did not read the entire article, and that is why this thread is wandering...

I read the article, and at the middle part started to scan through to the rest when I thought I understood what the gist of it was about.

Basically, he said that the top 0.1% is getting richer, at the expense of the bottom 90%. The 9.9% like us still do OK, hence we turn a blind eye to allow this to happen.

Even if this is true, another question that many brought up here is whether the bottom 90% are doing better than they did before.

What raised my eyebrow was that the author accused us that "We have left the 90 percent in the dust—and we’ve been quietly tossing down roadblocks behind us to make sure that they never catch up." Whoa!

I know plenty of recent immigrants to this country who have done well. They did not have any roadblocks to have their children becoming nurses and MDs. These children came here in their late teens, and were not born here. People say those are just anecdotes, but those are what I know.

 

[marko]

And things could get uglier than that. (Think French Revolution).

Thanks for the heads up.

But Guillotines on the Capital steps are [-]pretty[/-] really, really low on my worry list.

 

[corn18]

IMHO, "we" have identified a "problem" without need for a solution.

Rant over.

Like I said earlier, a hammer in search of a nail.

 

[NW-Bound]

Here's something else that just crossed my mind.

Statistics show that the 0.1% in this country holds a lot of wealth, but how much of that wealth come from abroad, and not from the bottom 90%? I use Airbnb in Europe, so Airbnb takes some money there. When I look at Google Maps for restaurants in Europe, I see that many comments are made by Europeans. And in the stores, I see many American brands, such as Frito Lay and Pringles. Come on. I want to buy European food when in Europe.

Here's something more astounding. Recently watching a documentary video of life in the Urals, I saw a woman shown picking wild nettles, and she said it was to make a lotion to wash her hair to control dandruff. She said it was as good as Head and Shoulders shampoo.

What the heck? I am impressed that this woman in a small village in Russia knows about Head and Shoulders. Is it the only anti-dandruff shampoo in the world?

The active ingredient in Head and Shoulders is zinc pyrithione. I don't think P&G has an exclusive right to use it. Another substance to control dandruff is selenium sulfide, and I don't think its use is restricted either. Perhaps there is be more to it than I know.

And then, some companies should find a way to make nettle into a commercial shampoo too. Why do they have to import Head and Shoulders?

 

[RAE]

I'm pretty sure that everyone that is posting on this thread did not read the entire article, and that is why this thread is wandering. And most of the people here on this forum are very happy with their financial position in life (including myself)... And that is precisely what the article is about. And there are a lot of people patting themselves on the back for how successful and hard working they are. (The article mentions that also)

If you are happy with a lot of poor, maybe destitute people running around, you have not thought through how this could play out. I'm sure that the upper 10% were pretty happy in the early part of the depression, until their stocks tanked about 90%. And things could get uglier than that. (Think French Revolution).

+1. The current level of wealth inequality is similar to what it was in the late 1920s, and that did not end very well, as we all know. And if the current trends continue for much longer, we will exceed the inequality seen in the 20s. So it's not too hard to predict that, at some point, perhaps in the not-too-distant future, the masses who are trying to survive on crumbs are going to get fed up and do something to change their situation. I think we may see the start of that frustration expressed in how people vote in the upcoming 2020 election, but we'll see.

 

[timo2]

If you are happy with a lot of poor, maybe destitute people running around, you have not thought through how this could play out. I'm sure that the upper 10% were pretty happy in the early part of the depression, until their stocks tanked about 90%. And things could get uglier than that. (Think French Revolution).

That is indeed something many of my neighbors don't consider. I live in a statistically middle class area (not just people anecdotally claiming middle class status). Included in the neighborhood are people that are pushing their proverbial 'envelopes' so their kids can go to the schools here. So it is a nice happy bunch, but now some crime is coming to the area, beyond the normal 'teenager next door' stuff. And people are wondering why. This opinion article explains why, IMO.

 

[starry night]

You asked for some quoted content

The article is quite long, and I admit to not reading it in its entirety, though I am sure some here did.

If there are points to made that we missed, please post a quote that we can discuss.

To me, when I start reading an article with the "attitude" that, "I am rich, but I am not worthy, and neither are you" my eyes tend to glaze over.

If there is something I missed, please enlighten me.

You asked for some quoted content to discuss, since this is a long article with lots of points to make.
Here’s one section, helping us appreciate how the tax benefits accrue to the top percentiles.

“Let us count our blessings: Every year, the federal government doles out tax expenditures through deductions for retirement savings (worth $137 billion in 2013); employer-sponsored health plans ($250 billion); mortgage-interest payments ($70 billion); and, sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow ($161 billion). In total, federal tax expenditures exceeded $900 billion in 2013. That’s more than the cost of Medicare, more than the cost of Medicaid, more than the cost of all other federal safety-net programs put together. And—such is the beauty of the system—51 percent of those handouts went to the top quintile of earners, and 39 percent to the top decile.

The best thing about this program of reverse taxation, as far as the 9.9 percent are concerned, is that the bottom 90 percent haven’t got a clue. The working classes get riled up when they see someone at the grocery store flipping out their food stamps to buy a T-bone. They have no idea that a nice family on the other side of town is walking away with $100,000 for flipping their house.

But wait, there’s more! Let’s not forget about the kids. If the secrets of a nation’s soul may be read from its tax code, then our nation must be in love with the children of rich people. The 2017 tax law raises the amount of money that married couples can pass along to their heirs tax-free from a very generous $11 million to a magnificent $22 million. Correction: It’s not merely tax-free; it’s tax-subsidized. The unrealized tax liability on the appreciation of the house you bought 40 years ago, or on the stock portfolio that has been gathering moths—all of that disappears when you pass the gains along to the kids. Those foregone taxes cost the United States Treasury $43 billion in 2013 alone—about three times the amount spent on the Children’s Health Insurance Program.”

So.....let’s s chew on that for a bit.

To me, the point in discussing the growing disparity in incomes and wealth in our nation is that the less-advantaged the lower 90% is, means the less economically advantaged our nation is as a whole.

MY LIFE is improved by having a well-educated, informed, productive population. The better that the 90% can do, means the better our economies do. People can buy the products of our industry, can eat out more, vacation more, contribute more in payroll taxes, FICA.

I say a good income for everyone else makes me happier and more secure.