Should Rich People Pay More In Taxes?

Goldman Sachs earnings:

Beset by accusations of securities fraud, Goldman Sachs nevertheless showed Tuesday that it was still very good at what it does best: making money. Earnings for the Wall Street giant rose 91 percent in the first quarter of 2010, to $3.46 billion [. . .] In addition, Goldman said it had set aside 43 percent of revenue in the first quarter for employee salaries and bonuses, down from 50 percent for the period a year ago.

(Emphasis supplied.) Let's do the math 0.43 X 3.46 billion = $1,487,800,000. [NOTE: The article states that 43% of revenues was set aside,which actually amounts to $5.5 billion set aside in compensation.] FOR ONE QUARTER!! To put this in perspective, you know that huge progressive win Chris Bowers at Open Left likes to talk about in the health bill? The money for community clinics? Well, the money to be spent for community clinics in one year is $478 million LESS than Goldman bonuses in six months (more likely, given my mistake between revenues and earnings, the amount paid to Goldman employees exceeds by more than double the amount spent yearly on community health clinics, the "great progressive victory" of the health bills).

Maybe, just maybe, the rich can afford to pay a few percent of the money the get to help sustain a government that saved their bacon. Just a thought.

Speaking for me only

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    Especially Since (5.00 / 3) (#6)
    by bob h on Tue Apr 20, 2010 at 10:05:37 AM EST
    much of this profit derives from the "carry trade" wherein they borrow from the Fed at essentially zero interest rate, then invest it in safe securities at decent interest rates.  Much of this profit is a gift, and not due to any inherent talent for money-making.

    Not to mention the portion (5.00 / 2) (#48)
    by ruffian on Tue Apr 20, 2010 at 11:30:36 AM EST
    that is made because the tax code encourages the middle class to have mortgages and retirement accounts. The middle class has no easily used tax deductions that do not subsidize the banks. Why is there a minimum threshold on deductions due to health care and education expenses?

    Terrific point! (none / 0) (#53)
    by Militarytracy on Tue Apr 20, 2010 at 11:37:12 AM EST
    Hey, I think calling myself (5.00 / 1) (#59)
    by ruffian on Tue Apr 20, 2010 at 11:47:39 AM EST
    a liberal means I should be able to argue for progressive taxation in my sleep!

    There's also the other end (none / 0) (#67)
    by jbindc on Tue Apr 20, 2010 at 11:59:31 AM EST
    If you ate middle class, single, and no mortgage or kids, then you also get screwed.

    Add to that the fact that if you make more than $75,000, you don't get to deduct the interest you pay on your student loans.


    Exactly right... (none / 0) (#8)
    by kdog on Tue Apr 20, 2010 at 10:13:05 AM EST
    so instead of higher tax rates that will also effect people who earn a ton o' dough honestly, why not just stop giving money away to Goldman Sachs in the first place?

    Because the structure (none / 0) (#12)
    by Militarytracy on Tue Apr 20, 2010 at 10:20:19 AM EST
    that doesn't serve the people and only really serves elites would collapse kdog, there would be martial law....remember?

    I forgot... (5.00 / 1) (#19)
    by kdog on Tue Apr 20, 2010 at 10:25:18 AM EST
    if we stopped the Goldman free money train, I'd have starved to death by now...silly me.

    Hear hear! (none / 0) (#11)
    by Militarytracy on Tue Apr 20, 2010 at 10:19:07 AM EST
    Makes me so mad I could spit fire!  Wouldn't you like an almost zero percent interest rate loan too?  Well too effing bad, you aren't a master of the universe!

    Of course they should- who benefits more (5.00 / 1) (#34)
    by ruffian on Tue Apr 20, 2010 at 10:56:57 AM EST
    from our enormous security establishment? The middle class with nothing to lose but their underwater mortgaged home, or the rich?

    that was way too easy.

    That's a winning argument ruff... (5.00 / 1) (#38)
    by kdog on Tue Apr 20, 2010 at 11:18:06 AM EST
    even for a knee-jerk anti-state cat like me...it's their protection racket after all, and I sure as hell don't wanna pay for Goldman's muscle.

    But I feel bad for people like Bruce Springsteen or Lebron James... those who earn obscene amounts of money via the spread of joy and entertainment.  They shouldn't have to chip in more for Goldman's protection racket.


    I think both of them (5.00 / 1) (#44)
    by ruffian on Tue Apr 20, 2010 at 11:27:06 AM EST
    and other members of the entertainment and sports industries have just as much to protect as Goldman. The Boss does not want his work pirated, and LeBron needs stadiums to play in. They literally can't make a living without the government.

    But those services... (none / 0) (#54)
    by kdog on Tue Apr 20, 2010 at 11:37:39 AM EST
    are more in line with the services all citizens enjoy...starving artists still have their copyrights protected, the court stenographer works in a government building...all a far cry from the license to steal Goldman gets.

    Sure ,but whose copyrits are more valuable? (none / 0) (#61)
    by ruffian on Tue Apr 20, 2010 at 11:49:31 AM EST
    Yours or John Grisham's? When the Chinese take over and take it all away, who will be crying more?

    True... (none / 0) (#65)
    by kdog on Tue Apr 20, 2010 at 11:57:22 AM EST
    but that is a testament to the genius of Bruce Springteen, him being so talented and his art being in such high demand...not the government giving him favored artist status like Goldman gets favored gambler status.

    I have no desire to "soak the rich", if you earn it fair and square god bless ya...all I'd really like to see is a fair game down at the Wall St. casino, and reasonable tax rates for all, rich and working class.  

    But I guess that is an impossibility in the current framework...so we're left to argue about tax rates.


    I just want it fair too (none / 0) (#68)
    by ruffian on Tue Apr 20, 2010 at 12:00:28 PM EST
    I can think of at least one person whose opinion I trusted on fair tax rates- Bill Clinton. Bring things back to the 1993 rates or a tad higher on the rich to pay for the wars, and I would probably be satisfied.

    Plus, of course (none / 0) (#70)
    by ruffian on Tue Apr 20, 2010 at 12:03:35 PM EST
    Close up he loopholes only the rich can use, so that they actually pay something close to the tax rate for their bracket.

    Even better... (none / 0) (#76)
    by kdog on Tue Apr 20, 2010 at 12:18:00 PM EST
    end the occupations, close down half the prisons, end corporate welfare...sh*t we might even have enough at existing tax rates to start paying down that debt:)

    The wealthy pay unprecedented (none / 0) (#60)
    by Militarytracy on Tue Apr 20, 2010 at 11:49:31 AM EST
    low taxes right now though, and I don't know many savvy business heads or people out there spreading joy who don't want to pay their fair share.  They aren't going to send a bonus to the IRS though :)  I wouldn't, tax everyone correctly :)  I think of Bill Clinton and Bill Maher both dissing the Bush tax cuts big time yet laughing in the next breath because they were actually arguing to have to pay a lot more taxes.

    The rub is "fair share"... (none / 0) (#74)
    by kdog on Tue Apr 20, 2010 at 12:08:21 PM EST
    and where the money ends up after it is collected as tax.  

    I feel over-taxed chipping in my measley 4 grand or so a year in federal income tax off my 40 hrs. of drudgery a week...I can't imagine how the cats making real good bank through honest hard work putting in 60+ hours must feel about their portion...then factor in where much of it goes...Goldman Sachs & assorted shady cronies, obscene prison pupulation, occupation and war...it'll drive you insane if you let it.  

    Granted, the bad stuff is more noticeable than the good our taxes fund, but still...there is a ton of bad stuff we could cut before we ask anybody for more dough.


    Even though we have the Goldman (5.00 / 1) (#72)
    by Anne on Tue Apr 20, 2010 at 12:04:40 PM EST
    earnings reports to pull numbers from, maybe we should look at the tax return of real people who would be considered "rich" by anyone's definition, I think: the president and his wife, who reported 2009 taxable income of $4,980,858, on which they paid Federal tax of $1,792,414 - about 36%.  

    They paid Illinois income tax of $164,426.

    Most of their income was from book sales.

    [And in case anyone is wondering what the "Henry G. Freeman Decd TW" income is, that's the $12,000 annuity paid annually to First Ladies from the trust established under Freeman's Will because he thought the president's salary was so low; see here for details]

    Should they pay more than this?  Should anyone who reports this kind of income pay more of it in taxes?  Well, I think so.  What's the argument that they should not?  That they already pay the lions' share of the taxes collected?  Well, how does the person making $40,000 afford to, you know, live and ever expect to retire to a life that doesn't include cat food for dinner if he or she keeps being asked to pay more - more sales tax, more gas tax, more taxes on phone service and electric, more property tax, more state tax?  More, more, more in an economy where salaries have been frozen for many and most of the basics cost more, too.  I would venture to guess that the reverse economic situation for the $40K earner is more devastating than for those  in the Multi-Million Dollar Club.  If you've already sold the one house you scrimped and sacrificed to buy, if you're already taking the bus because you sold your car, if you're already shopping discount and using coupons, if you've already given up your cell phone, your cable and raised your deductibles on whatever kinds of insurance you have - what else can you cut?  And why should your life have to keep getting more and more meager, when what you do to earn the money you report is a lot harder, really, than what some guy at Goldman Sachs does to earn his?  

    But we don't reward people for their effort - the guy swinging a hammer and pouring concrete all day doesn't get paid what professional athletes make, even if both are expending similar levels of physical effort - because the athlete makes more money for others and the laborer doesn't.  Just like the fact that good teachers may make it possible for their students to be the next Goldman guru, he or she doesn't get paid what the Goldman guy does because the teacher isn't making money for anyone else.

    In this country, unless you can make other people rich, your value is very, very small - and yet, those who make the big bucks whine all the time about paying taxes - people who get the equivalent of lottery winnings every year, who have the ability to secure their futures and the futures of their descendants for generations are whining about paying more tax.

    Oh, the humanity!

    More taxes above a certain income level, and make it such that it would be difficult to re-characterize what someone is paid as something other than income in order to circumvent the tax.

    Over what limit? (5.00 / 1) (#95)
    by marcnj on Tue Apr 20, 2010 at 02:33:24 PM EST
    A family of 5 earning $250,000 is far different from the kind of money that the first family claims (especially when said family is paying $100,000 a year in college tuition for the next 3 years AND lives in NJ!) A family making $5 million+ can certainly pay more before they "feel" it.  Should the "barely rich" be taxed at the same rate as the "uber-rich"?

    It would appear that the (5.00 / 1) (#100)
    by me only on Tue Apr 20, 2010 at 03:32:59 PM EST
    answer to rich is "anyone who makes more than me."

    And $250K for a family of five (none / 0) (#118)
    by Anne on Tue Apr 20, 2010 at 11:12:57 PM EST
    is a world apart from the family of five making $50,000, isn't it?  It's even in a different neighborhood from that same family making $100K.

    The difference is that the families making $50K and $100K make too much to qualify for any kind of financial aid to send their kids to college - they get to borrow the money.  Yay!

    My heart doesn't bleed for your $100K college tuition bill; try community college for the first two years and a state school to finish.  It's cheaper and the education is just as good.  The downside is that it will be harder to hold your head up with your own peer group, though - the one that brandishes acceptance letters from the Ivies, and the 5-figure tuition bills that go along with them, as proof of their own worth.  Yeah - been there, seen that, really unattractive, worse than the peer pressure the kids are feeling.


    I don't want sympathy (none / 0) (#120)
    by marcnj on Wed Apr 21, 2010 at 09:52:49 AM EST
    We've made our choice to send our kids to the schools of their choice (definitely not ivies)instead of buying new cars or even owning a home so I don't think I'm impressing anyone.  I can't believe that $50,000 or even $100,000 incomes do not qualify for need based aid.  Two of the schools we visited touted the fact that 80% of the students received some assistance from the school. I find it hard to see the reasoning that $100,000 is to $250,000 as $250,000 is to $5,000,000 but that must be because I am "rich".

    Warren Buffett (5.00 / 3) (#78)
    by Zorba on Tue Apr 20, 2010 at 12:21:51 PM EST
    Currently the third richest man in the world, on our tax system (quote from 2007):

    Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

    Buffett said that was despite the fact that he was not trying to avoid paying higher taxes. "I don't have a tax shelter," he said. And he challenged Congress and his audience to see what the people who "clean our offices" are taxed, to loud applause.


    Funny (none / 0) (#103)
    by coast on Tue Apr 20, 2010 at 04:07:38 PM EST
    how Buffett and his kind (meaning rich who say they don't pay enough in taxes) don't pay in more than they owe.  The government I'm sure would be very happy to accept their accept their money.  In fact here is where he can send it:

    If you wish to do so, make a check payable to "Bureau of the Public Debt." You can send it to: Bureau of the Public Debt, Department G, P.O. Box 2188, Parkersburg, WV 26106-2188. Or you can enclose the check with your income tax return when you file.

    My comment to Mr. Buffett, put your money where your mouth is.  Nothing is stopping him or anyone else from paying in more.


    Interestingly enough, (none / 0) (#104)
    by sarcastic unnamed one on Tue Apr 20, 2010 at 04:14:14 PM EST
    I believe Buffet has some mechanism in place whereby the bulk of his wealth will be donated to charity.

    You'd think, if he really believed in the efficacy of gvt, he'd have decided to donate the dough to the gvt instead...


    What would be the point (5.00 / 1) (#121)
    by lilburro on Wed Apr 21, 2010 at 10:51:17 AM EST
    of Buffet donating his money to the federal government?  The point he is making isn't about him personally, but about people in his income bracket.  Of course the government is not going to be as effective as certain private foundations.  But it certainly does much more, for both rich and the less well off.

    Government is not something you voluntarily donate to.  The concept of taxation is not based on that premise.


    Your correct on the charity. (none / 0) (#106)
    by coast on Tue Apr 20, 2010 at 04:19:20 PM EST
    I believe over half is to go to, of all places, the Bill Gates Foundation.  I guess he thought they where in need of the money.  Talk about sticking together.

    I believe (5.00 / 0) (#108)
    by CST on Tue Apr 20, 2010 at 04:38:56 PM EST
    he is giving it to the gates foundation because he is very close friends with the gates's, and they are significantly younger than him, and he trusts that they are spending that money in a way that he feels comfortable with.

    As for not paying more to the gov't that's a good question.  Maybe he does, I don't know.

    But he is not just giving his money to Bill Gates to spend it as he will on private jets.  He is giving it to them because they share similar principals about how wealth should be spent and given back to the people.


    Considering the Gates Foundation (none / 0) (#113)
    by coast on Tue Apr 20, 2010 at 05:00:58 PM EST
    is probably the most well endowed foundation on the planet ( I believe their $30+ billion in assets is larger than the individual annual GDP of about half the countries in the world), I don't think they really needed to double their money.  But that is not the point.  He can give his billions to whomever he wants.  But don't stand up there and repeatedly tell us that "I don't pay enough in taxes.  Congress needs to do something".  That is one of the most disingenuous statements I have ever heard.  He can certainly pay more in if he wanted to.  A more accurate statement would be "I paid in what I was required to pay and I didn't pay in a penny more".  I wouldn't fault him for that, he is following the law.  But to act like he would really wants to pay in more, but is somehow kept from doing so is what rubs me the wrong way.

    it's also one of the most effective (none / 0) (#114)
    by CST on Tue Apr 20, 2010 at 05:11:12 PM EST
    charity organizations in the world.

    I just don't like the fact that you characterized it as him giving it to the Gates's as if he was adding it to their personal wealth.  He gave it to them because he trusts them to spend it.  Indeed, I believe they are required to spend it within a certain time frame.  And it is only valid so long as either Bill or Melinda is in charge and running things there.  Clearly it's a trust issue - he trusts them to spend it the way he would.  And trusts that the foundation is set up and run in a way in which it can actually effectively use that amount of money.  A lot of charities couldn't.

    Honestly, if every wealthy person on this planet gave as much of their money to charity as the buffetts and gates's, maybe people wouldn't feel such a need to tax the rich.

    But that's not the case.


    CST, as a neutral observer, (none / 0) (#115)
    by sarcastic unnamed one on Tue Apr 20, 2010 at 05:27:27 PM EST
    I really don't think the poster
    characterized it as him giving it to the Gates's as if he was adding it to their personal wealth.
    Not at all.

    You are totally missing the point CST. (none / 0) (#116)
    by coast on Tue Apr 20, 2010 at 07:18:57 PM EST
    I know that his giving away his money in no way adds to his wealth.  The whole conversation on charity is a tangent to the original post and comment.

    The point of my original post and my response to your post was to convey the fact that Buffett is being sactimonious in terms of his position on the payment of his taxes.  He, and others, stand before us and say we should be paying more in taxes.  Yet he, and other with the ability to pay more without feeling it the least bit in their everyday lives, make no effort to actually pay more than what they are required to pay.


    I have absolutely no problem (5.00 / 1) (#110)
    by Zorba on Tue Apr 20, 2010 at 04:50:55 PM EST
    with Buffett or the Bill and Melinda Gates Foundation giving money to initiatives to improve health, education, poverty, and so on all around the globe (including this country).  If I had all this extra money to throw around, I'd much rather be giving to things that are important to me all around the world (such as alleviating poverty, improving education, trying to find cures for horrible diseases, and similar things) than just giving this extra money to our government to spend on useless and counter-productive wars and bailing out big financial institutions.  But that's just me.

    should go to charity, but our money should go to the gvt.

    Buffet (none / 0) (#122)
    by Emma on Wed Apr 21, 2010 at 01:35:48 PM EST
    It's probably more effective for Buffet to advocate for systemic change than to put on a hair shirt.  YMMV.

    BTD (none / 0) (#1)
    by lilburro on Tue Apr 20, 2010 at 09:35:00 AM EST
    why penalize success!!!  

    On a related note, does anyone have any books about progressive taxation or blog posts I could read?

    I know you (5.00 / 2) (#3)
    by TeresaInSnow2 on Tue Apr 20, 2010 at 09:47:16 AM EST
    needed a snark tag on that one, however, I'll also make a serious reply to it.

    The problem is,

    Minor success -- penalized
    Major success -- not penalized.

    It would be good if major success was "penalized" as much as minor success.


    Works for me (none / 0) (#10)
    by Militarytracy on Tue Apr 20, 2010 at 10:15:00 AM EST
    Love it!

    Actually (none / 0) (#5)
    by robotalk on Tue Apr 20, 2010 at 10:00:56 AM EST
    that probably is precisely Goldman's strategy in releasing this now.  What sense would it make otherwise?

    Excellent perspective BTD... (none / 0) (#2)
    by kdog on Tue Apr 20, 2010 at 09:43:15 AM EST
    more than a years worth of health clinic funding...good grief.

    Though I'm not sure what taxing money-pigs at higher rates is gonna accomplish, it all seems to get funneled back into their greedy little paws, by hook or by crook...maybe if we weren't living in an oligarchal state it would accomplish some good, but under this framework it's just passing money back and forth between very select few hands...why waste time with the paperwork.

    It seems quite unusual to (none / 0) (#4)
    by robotalk on Tue Apr 20, 2010 at 09:59:47 AM EST
    give away this much revenue.  I suspect Goldman knows it will either be gone or broken up in the near future.

    Or it may be a pay off to keep people there who should know better.  And otherwise know things Goldman would rather not have out in the public.

    Last year they "gave" (none / 0) (#9)
    by me only on Tue Apr 20, 2010 at 10:14:33 AM EST
    away 50% of revenue.  Baseball regularly "gives" away 90% of its revenue to baseball operations (55% in MLB salary.)

    Where I work we "give" away 85% of our revenue to employees.

    Profit margin for most companies is less than 10%.


    Then your product is not a product per se (none / 0) (#41)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:21:16 AM EST
    but a service with apparently no overhead.

    You mean, like (none / 0) (#43)
    by me only on Tue Apr 20, 2010 at 11:26:41 AM EST

    Like yours?


    Yep (none / 0) (#51)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:35:40 AM EST
    My overhead is relatively small.

    I did not mean it in a pejorative sense.

    Of course, I do not file as a corporation, but as an individual. although I of course have an LLC structure.

    But that really does not insulate me from liability, which is another issue altogether.


    I onliest brought it up (none / 0) (#75)
    by me only on Tue Apr 20, 2010 at 12:16:24 PM EST
    because Goldman doesn't really have a bunch of overhead either.  Not like (retailers) WalMart or (production) ExxonMobil.

    Investment banks don't even have the mess of branches.

    You are insulated from some liability.  I mean if I could hire Jeralyn to sue your LLC for $100 million because you didn't even bother to pick Amstel Gold or La Fléche Wallonne (still time) and win, you would just fold and start a new LLC instead of paying me forever.  Which is a long way of saying, I still await your pick...


    I want to see how Contador (none / 0) (#83)
    by Big Tent Democrat on Tue Apr 20, 2010 at 12:35:48 PM EST
    survived his car trip.

    Revenue and Earnings are (none / 0) (#7)
    by me only on Tue Apr 20, 2010 at 10:12:06 AM EST
    not synonyms.  Goldman employees did not earn $1,487,800,000. in one quarter.

    They made $5.5 billion, which is 43% of $12.78 billion (revenue).  You also made the mistake of calling this bonus money.  This is salary and bonus money.

    So in three months Goldman employees made 10 times the annual amount of the health clinic funding.

    However, without knowing how many employees Goldman has, we don't really know what this means.  If Goldman has 20,0000 employees that is an average of $275,000.  Again this is not all bonus money.  This is total monetary compensation.

    Me only (none / 0) (#13)
    by Militarytracy on Tue Apr 20, 2010 at 10:21:54 AM EST
    This sounds to me like a perfect moniker for a Goldman Sachs employee :)

    My mistake (none / 0) (#14)
    by Big Tent Democrat on Tue Apr 20, 2010 at 10:22:43 AM EST
    (if it is a mistake, bonuses on revenue seems odd to me) understates the amounts paid.

    Your comment strengthen my point it seems to me.


    It is not just bonuses (none / 0) (#23)
    by me only on Tue Apr 20, 2010 at 10:31:28 AM EST
    it is monetary compensation.


    Indeed, Goldman's staff was paid well for its support. Compensation rose 17% to $5.5 billion from $4.7 billion during the year-ago period, making Goldman employees among the most highly paid on the Street. However, compensation declined as a percentage of the company's net revenue, to 43% from 50%.

    So the 5.5B number (5.00 / 2) (#27)
    by Big Tent Democrat on Tue Apr 20, 2010 at 10:34:47 AM EST
    is correct.

    Shocking frankly.

    If ever there was an argument to raise taxes on the rich, this is it.


    Then you have made a truly lousy (none / 0) (#35)
    by me only on Tue Apr 20, 2010 at 11:02:30 AM EST

    ExxonMobil spent about $50 billion on compensation in 2009.  There are tens of thousands of ExxonMobil employees that are not rich.

    If $22 billion per year in total compensation is a reason to raise taxes, I guess $615 billion is a reason to really soak it to them.

    Yeah, $615 is the amount of OASDI from 2008.  Over $150 billion per quarter.

    Get it.  The number $5.5 billion might seem like a lot, but until you know the distribution (all for me, none for you) it doesn't help your argument, except with those who already agree with your position.

    Another fact.  Federal taxes in the US are the most progressive in the OECD.


    Ugh (5.00 / 2) (#36)
    by lilburro on Tue Apr 20, 2010 at 11:07:55 AM EST
    are we really talking about Exxon Mobil?

    Larger corporations, like Exxon Mobil, were able to duck taxes legally by using subsidiaries in the Cayman Island, Bermuda and the Bahamas to shelter cash from overseas operations.

    A recent Forbes Magazine article reported that Exxon Mobil, with a record $45 billion profit last year, paid $15 million in income taxes -- but all overseas, nothing to Uncle Sam. Likewise, General Electric pulled in $10.3 billion in pre-tax income but owed nothing in U.S. income taxes, Forbes reported.

    Individuals pay taxes too (none / 0) (#39)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:19:33 AM EST
    The Exxon Mobil employee who makes 50K/yr  would pay not taxes in my world.

    I never want to live in your world (none / 0) (#42)
    by me only on Tue Apr 20, 2010 at 11:24:50 AM EST
    In my world those who don't pay taxes wouldn't be allowed to vote.

    You get what you pay for.


    Whoa! (5.00 / 1) (#47)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:29:42 AM EST
    Suffice to to say that I find your position to be extreme.

    Not really all that far (none / 0) (#55)
    by me only on Tue Apr 20, 2010 at 11:40:35 AM EST
    off from 1789.  I am sure that you know the SC cases much better than I do, but prior to the mid 19th century you had to own real property to vote.  It varied from state to state.

    Don't confuse my position with racism, sexism or religious preference.  I don't agree with the original requirements of white, male, protestant.


    Sure (5.00 / 2) (#56)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:43:32 AM EST
    And in 1789, slavery was legal.

    Not trying to compare your positions on the two issues, but merely pointing out that just because something was reasonable in 1789 does not mean it is today.

    Or to take a somewhat milder comparison, women who owned property and paid taxes also could not vote in 1789.

    But then I am a Living Constitutionalist.


    And of course you jumped to the ridiculous (none / 0) (#66)
    by me only on Tue Apr 20, 2010 at 11:57:35 AM EST
    I figured you would, tried to head it off and you went one step further.

    Even 100 years ago people found your living constitution ideas silly.  After all they bothered to pass the 13th, 14th, 15th, 16th and 19th amendments.

    I am surprised you don't argue to change the senate to proportional representation based on it violating one man one vote (is that Reynolds)?


    Oh (none / 0) (#71)
    by Big Tent Democrat on Tue Apr 20, 2010 at 12:04:30 PM EST
    I argue for abolishing the Senate.

    But I recognize that requires a constitutional amendment.


    Why not get rid of the house (none / 0) (#77)
    by me only on Tue Apr 20, 2010 at 12:20:39 PM EST
    at the same time?  We could all live in a worker's paradise then!!!!!!

    Do you have an opinion on term limits (not the Constitutionality of them, just an opinion on whether they would improve things)?


    Because the House (none / 0) (#80)
    by Big Tent Democrat on Tue Apr 20, 2010 at 12:33:34 PM EST
    does not have the one man one vote infirmity you yourself identify.

    I suppose we could fix the Senate by not having it be bound by states or by making it proportional.

    But seems easier to just abolish it.


    Usually when I am over the top (none / 0) (#85)
    by me only on Tue Apr 20, 2010 at 12:43:33 PM EST
    people recognize it.  I will try next time to write

    Why not get rid of the house

    at the same time?  We could all live in a worker's paradise then!!!!!!

    /snark off.

    I thought by including the reference to the worker's paradise I would not have to indicate snark.


    Term limits (none / 0) (#89)
    by jbindc on Tue Apr 20, 2010 at 01:09:15 PM EST
    Voted them in tears ago for the Michigan state legislature.  Pretty much been an utter disaster - instiutional knowledge is pretty much a thing of the past, it takes forever for folks to get up to speed with each new legislative session because there are many new people each session, and constiuents (who don't really pay attention to state politics anyway) have a hard time getting answers or problems solved.

    My two cents, even though you didn't ask me.


    You mean no new legislation (none / 0) (#90)
    by me only on Tue Apr 20, 2010 at 01:21:52 PM EST
    for two years?  Doesn't sound like a disaster from here.  Sounds like a real test of the usefulness of the legislature.

    I'd love to try this on the federal level.


    Not just new legislation (none / 0) (#98)
    by jbindc on Tue Apr 20, 2010 at 03:07:51 PM EST
    But old boring stuff being held up ( especially the first couple of years) like the budget - which has to be passed in a certain amount of time and with certain statutory requirements.  

    But if you think it's ok for projects to be on hold and people not to get paid....


    So the state employees didn't get paid? (none / 0) (#99)
    by me only on Tue Apr 20, 2010 at 03:22:38 PM EST
    Really?  Or were they just paid late?

    I don't remember - it was 1992 (none / 0) (#112)
    by jbindc on Tue Apr 20, 2010 at 04:58:14 PM EST
    But here's part of an editorial from The Grand Rapids Press from March 21, 2010:

    At the beginning of next year, at least 29 of 38 state Senators will be gone. So will at least 34 of 110 state House members. They'll be out on their ears not because voters determined they did a poor job in office, or because challengers made a compelling case.

    They'll be gone simply because of term limits.
    When Michigan voters approved term limits in 1992, they expected to inaugurate an era of citizen legislators, who would be less beholden to lobbyists and more plugged in to the needs of ordinary people. However, those who watch the Michigan Legislature say that's not the way things have worked. In fact, term limits have handed even more power to special interests, as new lawmakers turn to Lansing insiders and long-time government workers for direction on difficult issues.
    The best solution to this problem would be for Michigan to just end term limits for lawmakers. That would allow citizens to decide each election cycle whether or not they want to keep a particular public servant on the job. Other states that once had term limits, including Utah and Idaho, have rescinded them.
    But term limits continue to enjoy broad popular support in Michigan, according to polls. A more realistic solution, one more likely pass muster with voters, would be a compromise: Create a part-time Legislature and allow longer term limits.
    Right now, state House members are limited to six years each. Senators can serve no more than eight years each. The governor, attorney general and secretary of state all face the same limit of eight years. All these limits are for life.
    The limits should be expanded to 12 years in each legislative chamber. The other office limits should stay in place. Those longer limits for members of the House and Senate would allow greater time to build knowledge of complex questions. In addition, they would create time to build trust between the parties.
    An expanse of term limits would reduce the amount of energy soon-to-be-ousted legislators spend plotting to run for other offices, or worrying about which of their short-timer colleagues is coming after their jobs.
    Robert LaBrandt of the Michigan Chamber of Commerce supported term limits 18 years ago. Today, he opposes them, in part because they have robbed the Legislature of institutional knowledge and seasoned leadership. He points out that the last three speakers of the House have had only two years of legislative experience before each was thrust into one of the most powerful positions in the state.

    Former Gov. John Engler, who initially supported term limits, has since recognized them as "disastrous." U.S. Rep. Peter Hoekstra, R-Holland, first ran for Congress as a big supporter of term limits and has since come to oppose them.

    A team of researchers at Wayne State University interviewed pre-term-limits Michigan legislators, as well as lawmakers elected because of term limits. They found that lobbyist influence over legislators increased after term limits took effect. They found, too, that lawmakers brought into office through term limits are less likely to monitor state agencies.
    So the very groups that were supposed to be challenged by "citizen legislators" have ended up with greater influence. That's not reform."


    Interesting (none / 0) (#119)
    by me only on Wed Apr 21, 2010 at 08:28:03 AM EST
    I misunderstood your initial reply "voted them in tears ago", thinking you meant two years ago.

    I am beginning to wonder if the grand experiment really can succeed.


    Because that's a just society. (none / 0) (#46)
    by lilburro on Tue Apr 20, 2010 at 11:29:04 AM EST
    I look forward to the ridiculous budget you come up with to support the IRS running around and taking pennies from people that can only afford that much.  Or perhaps you will choose to disenfranchise first?

    Naw, just don't give them (none / 0) (#63)
    by me only on Tue Apr 20, 2010 at 11:50:26 AM EST
    money.  The effective Individual Income Tax rate for the bottom quintile is -6.6%.

    I made less than 20K last year.. (5.00 / 1) (#94)
    by Raskolnikov on Tue Apr 20, 2010 at 01:47:02 PM EST
    ..and owed about 6% of that for Federal taxes and around 4% for state, not including FICA.  I only bring this up to show what a single person at around $10/hour would pay in taxes as I suspect I would be in the bottom 5% of earners on this site.  

    You must have completed your 1040 (5.00 / 1) (#97)
    by coast on Tue Apr 20, 2010 at 03:07:20 PM EST
    incorrectly, because there is no way to pay $1,200 on $20,000 in income.  Taking your $20,000 in income and reducing for your standard deduction and exemption (I'm assuming your single, not a dependent of another, and ndon't itemize) those reduce your taxable income to $10,650.  Taxed at 10% is $1,065 in tax.  Less your $400 credit makes your tax liability $665 or 3%.

    Correct (none / 0) (#109)
    by Raskolnikov on Tue Apr 20, 2010 at 04:44:42 PM EST
    Liability was $701.  I didn't include the tax credit because it was a stimulus provision (right?), but you're correct.

    That is because you don't have children (none / 0) (#96)
    by me only on Tue Apr 20, 2010 at 02:44:18 PM EST
    If you were married with two kids, the federal government would have paid you about $5,000.  FICA would not change.

    You're living in the present (none / 0) (#50)
    by coast on Tue Apr 20, 2010 at 11:35:25 AM EST
    if that employee is married and has two kids.  Anyone, not just Exxon employees, who made $50K and had two kids under 17 did not have to pay income taxes this year.  They actually received a refund.  So no need to dream BTD.

    They pay FICA (5.00 / 1) (#52)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:36:34 AM EST
    I would not have them pay that.

    I'm sure that you would get the (none / 0) (#62)
    by coast on Tue Apr 20, 2010 at 11:49:54 AM EST
    support of Exxon and other companies on that position since they pay half the tax.

    No (none / 0) (#69)
    by Big Tent Democrat on Tue Apr 20, 2010 at 12:03:24 PM EST
    They'd still pay in my scheme.

    Goldman has 32,000 employees (none / 0) (#15)
    by Big Tent Democrat on Tue Apr 20, 2010 at 10:23:23 AM EST
    worldwide is my understanding.

    If we turn the banks into public utilities... (none / 0) (#20)
    by lambert on Tue Apr 20, 2010 at 10:26:46 AM EST
    ... then none of this nonsense will happen.

    Let the rich gamble with their own money in casinos.


    I like this idea (none / 0) (#24)
    by Militarytracy on Tue Apr 20, 2010 at 10:31:33 AM EST
    Oh yeah, and those banks can pay their employees 90% of their earnings and I'm fine with that!

    Okay, that works (none / 0) (#28)
    by me only on Tue Apr 20, 2010 at 10:35:07 AM EST
    out to an average of $171,875 per person.  Nice average, but I am willing to bet Wal-Mart spends more than $5.5 billion per quarter on employee compensation.  

    It works out to $687,5000 per person (5.00 / 1) (#32)
    by Big Tent Democrat on Tue Apr 20, 2010 at 10:40:07 AM EST
    per year based on your assumptions by my math.

    Raising their taxes on the amounts between 200K and 687.5K to 39.6% seems a reasonable idea don't you think?  


    While I would not vote for such (none / 0) (#40)
    by me only on Tue Apr 20, 2010 at 11:20:45 AM EST
    a proposal.  It seems "reasonable."

    $200,000 per year in NYC is really not that lucrative.  You really think that making $250K/year in NYC is rich?

    A coworker of mine has a son, who married a girl whose dad is a hedge fund manager.  The wedding was on his private island.  They honeymooned in Europe.  Flying on his corporate jet.  Stayed at his villa in the Riviera.  Took his yacht to Malta and some Greek Island.  My co-worker's daughter in law allowance is $1 million per year.  She doesn't work for it, it is an allowance.  Say what you want, at least 90% of Goldman's employees work for their money.  Some of them work too much for it.

    You want to define rich using income.  I will never agree with that.  Even Chris Rock is able to distinguish between wealth and income.

    If Bill Gates woke up tomorrow with Oprah's money, he would slit his wrists.

    Well (5.00 / 2) (#45)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:28:51 AM EST
    I am for raising property and estate taxes as well, if that is any comfort to you.

    I also support a tax on luxury goods.

    I'm pretty consistent in supporting raising ALL taxes on the wealthy in any way possible.

    On this issue, I think I can be defined pretty clearly as a liberal.


    Plenty of ways to come up with tax deductions (none / 0) (#64)
    by ruffian on Tue Apr 20, 2010 at 11:56:13 AM EST
    for rent based on area, capped at a certain level, say the median for the area. As long as the deduction is available for all renters, I'm fine with it. mortgage is already deductible. Paid cash for your house? Good for you- your cost of living is now not as geographically determined as the rest of us.

    Your answer is to make the tax (none / 0) (#79)
    by me only on Tue Apr 20, 2010 at 12:30:22 PM EST
    code more complicated?

    I bought my house with a mortgage.  My payment was so modest that I did not qualify for the mortgage interest deduction (I take standard deduction).

    Raise standard deduction to the midpoint of mortgage interest and eliminate that deduction.  It does nothing for homebuyers and drives people to using their house as an ATM (to get the deduction).


    Um, Chris Rock is a COMEDIAN (none / 0) (#88)
    by Dadler on Tue Apr 20, 2010 at 01:07:27 PM EST
    And if you can't live just fine in NYC 250k, where the median income for the city is a little under 50 grand, well, I don't know what to say.  Unless you think for that money you SHOULD be living like a king, which is something different entirely, and which would require you move to the sticks.  The "you're not rich on x amount of dollars in NYC" argument seems a tired one to me.

    1st (none / 0) (#93)
    by me only on Tue Apr 20, 2010 at 01:35:24 PM EST
    Median Household income in NYC is over $55K.

    2) After 5.5 years of service NYPD pays $90,829, not including overtime.

    Making three times the typical police officer does not make you anywhere near rich.  Unless, of course, you have no idea what rich looks like.


    Taxes would actually be (none / 0) (#57)
    by coast on Tue Apr 20, 2010 at 11:45:45 AM EST
    much closer to be between 48% and 52%  depending on which state and city you live in.  Since I would assume a majority of their employees live in NYC, I would put it at the upper end of the range.

    If the employee is younger than 40 I would also count their share of SS and Medicare tax (7.65%) considering the fact that the likelyhood of receiving those benefits are very slim.  So that would put the tax at about 58% to 60%.


    Heh (none / 0) (#58)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:46:33 AM EST
    Though Note (none / 0) (#73)
    by The Maven on Tue Apr 20, 2010 at 12:06:35 PM EST
    that the Social Security portion of those taxes (6.2%) is capped to a maximum income level of $106,800 for 2009, and is 0.0% thereafter.  This means that on an income of $687,500, combined SS and Medicare taxes amount to less than 2.5% -- cumulatively, 5.2% less than the figure cited.

    Under the current rates and structure you are. (none / 0) (#82)
    by coast on Tue Apr 20, 2010 at 12:35:16 PM EST
    correct.  But under current law, namely health care bill, your numbers are meaningless in 2013 when the additional Medicare rate is applied to incomes of greater than $200K for individuals and $250K for joint filers and a 3.8% Medicare tax rate is applied against all investment income for those filers.  The additional Medicare rate on wages won't move your average rate very much, but the additional tax on investment income could.  In addition, considering the President's stance on the SS wage cap, I won't bet against a hike in the cap, or at least a reinstament at a certain income level, in the near future.

    Assuming you mean (none / 0) (#84)
    by me only on Tue Apr 20, 2010 at 12:38:44 PM EST
    marginal tax rate, you are still too high.  State and local income taxes are deductable from federal income tax, so there are not really additive.

    OASDI does not apply over $106,800, so that isn't additive, either.


    For those in theupper brackets (none / 0) (#86)
    by coast on Tue Apr 20, 2010 at 12:46:44 PM EST
    their itemized deductions are typically limited.  In addition, these are the brackets more susceptible to AMT, which state and local taxes are not allowed.  So I would argue with the assumption that state and local taxes are not additive.

    YES! (none / 0) (#16)
    by Chuck0 on Tue Apr 20, 2010 at 10:23:58 AM EST

    Two words (none / 0) (#17)
    by lambert on Tue Apr 20, 2010 at 10:24:09 AM EST
    Claw back.

    I can capitalize things too (none / 0) (#18)
    by roy on Tue Apr 20, 2010 at 10:24:09 AM EST
    First off, despite your fervor, you've actually understated the situation:

    Earnings for the Wall Street giant rose 91 percent in the first quarter of 2010, to $3.46 billion or $5.59 a share, up from $1.81 billion or $3.39 a share in the same period last year. Revenues increased 36 percent to $12.78 billion, up from $9.42 billion in the quarter a year ago.

    So the correct screed should read like this:

    Let's do the math 0.43 X 12.78 billion = $5,495,400,000. FOR ONE QUARTER!!

    Should they pay more in taxes?  It's absurd to raise the question without comparison to "more than what?".  Assuming all that money is being paid to people who are rich -- it isn't -- they're probably paying at least 28% tax on it.  Let's do the math: $1,538,712,000 FOR ONE QUARTER!!  State and local taxes may also apply!!

    I'm a little unclear on the community clinic numbers, but if I understand correctly, that means Goldman Sachs's employees are paying enough in taxes to fund the ENTIRE THING 6 times over!!

    So the American dream has now (5.00 / 1) (#22)
    by Militarytracy on Tue Apr 20, 2010 at 10:30:05 AM EST
    become a matter of who can best position themselves at the front of the spewing fount with their mouths wide open while still being able to beat anyone who would ask for a turn to a pulp?  What a delightful social fabric.

    oh yeah (5.00 / 1) (#25)
    by lilburro on Tue Apr 20, 2010 at 10:33:12 AM EST
    Goldman Sachs never gets anything from the government...

    government that saved their bacon.

    You should see what they go through (none / 0) (#30)
    by Militarytracy on Tue Apr 20, 2010 at 10:36:32 AM EST
    everyday.  It is excruciating, the worst pains a common working man or woman can experience....and so much sweat, they literally swim in pools of sweat.  They deserve this welfare.

    Ugh (5.00 / 1) (#33)
    by lilburro on Tue Apr 20, 2010 at 10:46:45 AM EST
    this is what I miss from Dem politics - a cohesive argument for progressive taxation.  The tea party people look at taxes as a matter of principle rather than economics (the Flat Tax is an awesome idea!  Uh...right!!) which of course makes no sense.  It sounds a lot more unfair and hellhole-ish to me than the any description/bad acid trip hallucination of any "socialist Obama government" I've heard.

    Goldman's Worldwide 08 Tax Rate 1% (5.00 / 1) (#29)
    by MO Blue on Tue Apr 20, 2010 at 10:36:00 AM EST
    Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.

    The company's effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.

    Forgot link (none / 0) (#31)
    by MO Blue on Tue Apr 20, 2010 at 10:37:42 AM EST
    As I state to me only (none / 0) (#26)
    by Big Tent Democrat on Tue Apr 20, 2010 at 10:33:17 AM EST
    I am skeptical that 43% of revenues is being set aside for compensation as opposed to 43% of earnings.

    Goldman has shareholders after all.

    I did a quick back of the envelope calculation and came up with an average compensation number for Goldman of $687,500 per employee based on my belief that Goldman has 32,000 employees worldwide.

    It seems more than likely that the top earners are making well upwards of 10MM/ per year.

    If, as you say, they pay an effective rate of 28% (and of course state and local taxes are deductible from federal taxes) - those making 10MM a year are taking home $7.2MM a year.

    Now to you this means they have paid $2.8MM a year and therefore we should be grateful to them.

    Personally, I think they should be grateful that our government saved their company and allowed them to remain in a position to make that kind of money.

    Clearly Your mileage varies.


    Are discussing Goldman Sachs, or The Rich? (none / 0) (#37)
    by roy on Tue Apr 20, 2010 at 11:10:00 AM EST
    First, a correction, my estimated tax payments would pay for the community clinic deal 3 times over, not 6.  Probably beside the point but I didn't want to leave a sloppy error out there.

    At $10MM/year, the overall federal tax rate asymptotically approaches 35%; I picked 28% as a conservative estimate for all rich employees.  And "of course" many state and local taxes are deductible, but it's not like the feds refund the whole amount, you still end up paying more overall as you pay more state and local.  So let's say they're taking home $6.5MM a year.

    Now, if we're talking about Goldman Sachs, what this means to me is that those people have $6.5MM they didn't earn.  They should be unemployed like so many bystanders to their mistakes, or (preferably) in other jobs that aren't based on stealing from other taxpayers.

    But if we're talking about whether Rich People should Pay More, what it means is that we should also be talking about the $3.5MM they currently pay.  If you want to talk about math, and you want to present numbers, and you want it to appear that math supports your claims, you have to have the relevant numbers.  Otherwise what you're doing is somewhere between unhelpful and dishonest.

    (To be fair, I'm ignoring deductions and shelters, and $10MM yearly is quite a high bar for calling someone "rich".  But the exact numbers aren't important since we know they aren't exact anyway.)


    Goldman Sachs as a subset of the rich (none / 0) (#49)
    by Big Tent Democrat on Tue Apr 20, 2010 at 11:33:00 AM EST
    Is it polemic? Sure? Maybe a bit of demogoguery to boot.

    Or a more polite word - populist.


    A representative subset? (none / 0) (#101)
    by roy on Tue Apr 20, 2010 at 03:56:17 PM EST
    The thing about subsets is that if you make decisions about a whole based mainly on extreme subsets, there's no particular reason to think you make good decisions.  If that's populism, populism should be disregarded.  That polemic and demogoguery should be disregarded is already settled.

    How much tax is paid by the bulk of those who you believe should pay more?  If you don't know the answer, you don't know they should pay more.  That sensation of knowledge you have is a delusion; what you have is just "rich, grrrrr".  That detachment from reason is something you've criticized the Right for.  Don't succumb to it yourself just because it's a good way to get people to do what you want.


    Thanks for this. (none / 0) (#102)
    by sarcastic unnamed one on Tue Apr 20, 2010 at 04:07:20 PM EST
    It explains my comments (way down on the bottom of this thread) way better than I did.

    IMO (none / 0) (#105)
    by lilburro on Tue Apr 20, 2010 at 04:15:25 PM EST
    this post is not about Goldman Sachs, it's reminding us of why progressive taxation is a good idea.

    Maybe, just maybe, the rich can afford to pay a few percent of the money the get to help sustain a government that saved their bacon. Just a thought.

    Speaking for me only

    Emphasis supplied...

    Goldman Sachs is a perfect example because they undermine the mistaken perception that the rich overpay and don't get anything for their money - uh, no, the richest in this country have policies tailored to ensure they stay employed, and lucratively, until the end of time.  Did I get that?  No, I got a $400 tax credit.


    Sales tax (none / 0) (#21)
    by Buckeye on Tue Apr 20, 2010 at 10:28:24 AM EST

    Isn't TL generally of the opinion (none / 0) (#81)
    by sarcastic unnamed one on Tue Apr 20, 2010 at 12:34:03 PM EST
    that laws and rules enacted in response to some highly emotional issue are generally a really bad idea?
    Maybe, just maybe, the rich can afford to pay a few percent of the money the get to help sustain a government that saved their bacon. Just a thought.

    apples to oranges (5.00 / 1) (#87)
    by CST on Tue Apr 20, 2010 at 12:56:39 PM EST
    taxing someone is not in the same league as  locking someone up for an extended period of time.  

    Plus this has been a key part of the liberal agenda for a long time.  It's nothing new.  Now there are just more reasons to do so.


    No. (none / 0) (#91)
    by sarcastic unnamed one on Tue Apr 20, 2010 at 01:24:48 PM EST
    Fundamentally I think it's pretty clearly apples to apples.

    No worries though, hypocrisy is a fundamental aspect of the human psyche. I accept that we all have it, regardless of political ideology.


    is apples to apples. Anything other than that is not my point...

    IRS Data and the "Rich" (none / 0) (#111)
    by SomewhatChunky on Tue Apr 20, 2010 at 04:54:15 PM EST
    From IRS Data for 2007 (latest data available)

    Top 5% paid 60.63% of All Fed Income taxes.

    Top 1% of the taxpayers paid 40.4% of all federal taxes

    The top 0.1% of taxpayers (141,000 people) paid 20% of all federal income taxes.

    If your AGI was $160,000 or more you were in the top 5% of all taxpayers

    An AGI of over $410,000 puts you in the top 1%

    These figures include all tax returns with a positive AGI - they exclude those who filed just to get a check.  Consequently, the above numbers are low.

    Average Federal Tax Rate

    All taxpayers:   12.68%
    Top 1%:      22.45%  (lots of dividend income here)
    Top 10%:    18.79%
    top 11-25%:   9.43%
    Bottom 50%:    2.99%

    Data Source:  

    Make of the above numbers what you will.  FICA and local taxes are not included.  It's hard to make the case that the rich are not paying a lot of taxes.  That's simply not true.    In fact, it seems a handful of people are paying for everybody else.

    You can debate whether you think that is right or not.

    Every Goldman bonus dollar (none / 0) (#117)
    by diogenes on Tue Apr 20, 2010 at 08:45:51 PM EST
    Every Goldman bonus dollar is subject to 35% marginal tax rate; if in NY State it also is subject to 7% NY tax rate.  The government does pretty well if Goldman pays bonuses.