The "growth economy" is not sustainable.

[bush_cheney2004]

Are you derailing the thread again with meaningless retarded bullshit?

No...you morph back and forth between the US and Canada so much...it is hard to know which you are talking about. This thread is about Canada...not the US dollar or US manufacturing or US competitiveness...big silly.

[eyeball]

Globalization is redistributing wealth and it will settle at a new equilibrium that will require that the standard of living in developed to countries drop. The idea that the entire world can rise to our level is a fantasy. There are simply too many people that want a piece of the action and are not willing to wait their turn. 50 years from now Canada will look like China and India with large gaps between the rich and the poor. No social safety net will be able to stop this because there will be no money to pay for it.

If the rich think they're going to get to sit back while everyone else takes the hit...

Like you said, there are simply too many people.

[dre]

Globalization is redistributing wealth and it will settle at a new equilibrium that will require that the standard of living in developed to countries drop. The idea that the entire world can rise to our level is a fantasy. There are simply too many people that want a piece of the action and are not willing to wait their turn. 50 years from now Canada will look like China and India with large gaps between the rich and the poor. No social safety net will be able to stop this because there will be no money to pay for it.

Thats right. If we stay the course theres absolutely no question we will be a third world country within a few decades.

We are just touching on free trade as it sits too. Wait until we end agricultural subsidies, and we're eating imported fruit, vegetables, and meat, while our farms are empty.

The bottom we are racing towards is a LOOOOOOOOOOOOOOOOOONNNNNNNNGGGGGGGGG way down there.

[bush_cheney2004]

We are just touching on free trade as it sits too. Wait until we end agricultural subsidies, and we're eating imported fruit, vegetables, and meat...

You're already doing that...no big deal. Protein is protein.

Edited September 7, 2011 by bush_cheney2004

[TimG]

We are just touching on free trade as it sits too. Wait until we end agricultural subsidies, and we're eating imported fruit, vegetables, and meat, while our farms are empty.

Yet in despite the signs we have 30% of the workforce who are protected by foreign competition and expect year over year wage and benefit increases and goldplated pensions that have to be paid for by taxing the people who are losing their jobs and their companies. It is not sustainable in a world were everyone else's income is headed down.

[dre]

You're already doing that...no big deal. Protein is protein.

You need jobs to buy protein.

Actually... Maybe we can get aid from Africa, once theyre richer than us

[dre]

Yet in despite the signs we have 30% of the workforce who are protected by foreign competition and expect year over year wage and benefit increases and goldplated pensions that have to be paid for by taxing the people who are losing their jobs and their companies. It is not sustainable in a world were everyone else's income is headed down.

A world where everyone elses income is headed down except for a tiny fraction of super rich isnt sustainable AT ALL, period. No matter what we do.

[bush_cheney2004]

You need jobs to buy protein.

Actually... Maybe we can get aid from Africa, once theyre richer than us

You can get AIDS from Africa right now.

[bush_cheney2004]

A world where everyone elses income is headed down except for a tiny fraction of super rich isnt sustainable AT ALL, period. No matter what we do.

'Tis true...even your Queen Elizabeth is losing ground, down to a mere $420 million these days. A pity....

[TimG]

A world where everyone elses income is headed down except for a tiny fraction of super rich isnt sustainable AT ALL, period. No matter what we do.

Stats for the US cause they are easier to find:

Top 400 households earned $138 billion in 2007.

Current federal deficit: 1.5 trillion.

Tax the rich at 100% (ignoring the consequences of such taxations level)

and you reduce the deficit to 1.4 trillion (takes into account taxes already being paid).

It is a drop in the bucket.

The real issue are the taxes paid by the broad middle class and the entitlements which are expected.

Ranting about the super rich may make you feel better but the real problem is elsewhere.

Edited September 7, 2011 by TimG

[Bonam]

A world where everyone elses income is headed down except for a tiny fraction of super rich isnt sustainable AT ALL, period. No matter what we do.

Proof that most everyone's in the world income is headed down? My guess would be that incomes in the developing world are rising rapidly.

[Bonam]

Stats for the US cause they are easier to find:

Top 400 households earned $138 billion in 2007.

Current federal deficit: 1.5 trillion.

Tax the rich at 100% (ignoring the consequences of such taxations level)

and you reduce the deficit to 1.4 trillion (takes into account taxes already being paid).

It is a drop in the bucket.

The real issue are the taxes paid by the broad middle class and the entitlements which are expected.

Ranting about the super rich may make you feel better but the real problem is elsewhere.

Er... while I agree with your general sentiment that hating on the rich won't solve any problems, the evidence in this post doesn't really show anything at all. Why only the top 400? Why not, for example, the top 5%? The income of the top 5% was ~600 billion in 2001 and is probably closer to 1 trillion today.

[dre]

Proof that most everyone's in the world income is headed down? My guess would be that incomes in the developing world are rising rapidly.

It wasnt my claim.

As far as whether global wages are growing or shrinking that would depend what products and services you put in the basket used to measure inflation.

[msj]

Stats for the US cause they are easier to find:

Top 400 households earned $138 billion in 2007.

Current federal deficit: 1.5 trillion.

Ranting about the super rich may make you feel better but the real problem is elsewhere.

And if the "rich" ignore the fact that the bottom 90% of Americans have seen real incomes decrease by 1% since 1970 then they may find that they aren't gonna feel too good once the people wake up and sharpen the guillotines. Report.

By my reckoning, the top 5% could easily afford to pay more tax and get another $350 billion into the treasury.

Apply some austerity to homeland security, defence and some other bloated government departments and the deficit would be insignificant.

Have revenue growth rebound back over time (revert to the mean) and the deficit would be non-existent.

Edited September 7, 2011 by msj

[jacee]

Stats for the US cause they are easier to find:

Top 400 households earned $138 billion in 2007.

Current federal deficit: 1.5 trillion.

Tax the rich at 100% (ignoring the consequences of such taxations level)

and you reduce the deficit to 1.4 trillion (takes into account taxes already being paid).

It is a drop in the bucket.

The real issue are the taxes paid by the broad middle class and the entitlements which are expected.

Ranting about the super rich may make you feel better but the real problem is elsewhere.

A middle class rapidly shrinking as capital is transferred to and hoarded by the wealthiest 1 percent 'offshore' untaxed.

Mission complete.

But what was the mission?

(Great discussion btw)

Edited September 7, 2011 by jacee

[dre]

Stats for the US cause they are easier to find:

Top 400 households earned $138 billion in 2007.

Current federal deficit: 1.5 trillion.

Tax the rich at 100% (ignoring the consequences of such taxations level)

and you reduce the deficit to 1.4 trillion (takes into account taxes already being paid).

It is a drop in the bucket.

The real issue are the taxes paid by the broad middle class and the entitlements which are expected.

Ranting about the super rich may make you feel better but the real problem is elsewhere.

Income concentration is a pretty big problem and its getting worse. And Im not ranting about the rich... they did exactly what they were supposed to do. But the framework shouldnt allow extreme concentration of wealth because that gets really ugly in the end for everyone.

[TimG]

Er... while I agree with your general sentiment that hating on the rich won't solve any problems, the evidence in this post doesn't really show anything at all. Why only the top 400? Why not, for example, the top 5%? The income of the top 5% was ~600 billion in 2001 and is probably closer to 1 trillion today.

The top 5% is everyone earning more than $160K. That does not make one super rich who was the target of dre. http://www.financialsamurai.com/2011/04/12/how-much-money-do-the-top-income-earners-make-percent/

I believe my point was the pain need to be spread across society and simplying beating up on billionaires is not going to accomplishing anything. Even doubling the rates up on the top 5% would bring in an hypoetical $600 billion* which still leave a deficit of 900 billion. That still requires a lot of pain to be born by the middle and lower classes. The problem is everyone seems to think the pain should be endured by someone else.

*(of course there is no chance of collecting an extra 600 billion because higher taxes reduce the number of high income earners).

Edited September 7, 2011 by TimG

[TimG]

But the framework shouldnt allow extreme concentration of wealth because that gets really ugly in the end for everyone.

It is still not clear why you think the super rich are the problem. The problem are the middle class entitlements and tax rates that do not pay for those entitlements. It could see raising taxes across the board as part of a comprehensive package but the 'make the rich' pay rhetoric is self defeating. Edited September 7, 2011 by TimG

[dre]

It is still not clear why you think the super rich are the problem. The problem are the middle class entitlements and tax rates that do not pay for those entitlements. It could see raising taxes across the board as part of a comphrensive package but the 'make the rich' pay rhetoric is self defeating.

It is still not clear why you think the super rich are the problem.

I just explained exactly why its a problem. Quite clearly.

[Bonam]

The top 5% is everyone earning more than $160K. That does not make one super rich who was the target of dre. http://www.financialsamurai.com/2011/04/12/how-much-money-do-the-top-income-earners-make-percent/

I believe my point was the pain need to be spread across society and simplying beating up on billionaires is not going to accomplishing anything. Even doubling the rates up on the top 5% would bring in an hypoetical $600 billion* which still leave a deficit of 900 billion. That still requires a lot of pain to be born by the middle and lower classes. The problem is everyone seems to think the pain should be endured by someone else.

According to your data, the top 5% earn 3 trillion in income (AGI) and pay 600 billion (20%) in taxes. Raise their (average) taxes to 70% (2.1 trillion) and you eliminate the deficit. Again, I agree with you, but the data you present doesn't show what you think it does.

The objection to "fixing the economy" by drastically raising the taxes on the rich alone is more of a philosophical and long-term-impact argument, rather than something directly obvious from current income numbers.

Edited September 7, 2011 by Bonam

[TimG]

According to your data, the top 5% earn 3 trillion in income (AGI) and pay 600 billion (20%) in taxes. Raise their (average) taxes to 70% (2.1 trillion) and you eliminate the deficit. Again, I agree with you, but the data you present doesn't show what you think it does.

Those numbers don't include state taxes. Raising it to 70% would exceed 100% of income. Doubling it is the maximum remotely feasible.

“If the rich were taxed at the same rates they were half a century ago, they’d be paying in over $350 billion more this year alone, which translates into trillions over the next decade. That’s enough to accomplish everything the nation needs while also reducing future deficits.”

That means taxing the top earners at 70% which, combined with state and local taxes, means the top earners would be giving up 85% of their income in New York, California and other high-tax states.

http://blogs.wsj.com/wealth/2011/04/11/can-taxing-the-rich-erase-the-deficit/

Edited September 7, 2011 by TimG

[dre]

The top 5% is everyone earning more than $160K. That does not make one super rich who was the target of dre. http://www.financialsamurai.com/2011/04/12/how-much-money-do-the-top-income-earners-make-percent/

I believe my point was the pain need to be spread across society and simplying beating up on billionaires is not going to accomplishing anything. Even doubling the rates up on the top 5% would bring in an hypoetical $600 billion* which still leave a deficit of 900 billion. That still requires a lot of pain to be born by the middle and lower classes. The problem is everyone seems to think the pain should be endured by someone else.

*(of course there is no chance of collecting an extra 600 billion because higher taxes reduce the number of high income earners).

Higher taxes dont neccesarily correlate to less income earners. We have seen low enemployment rates during relatively high tax rates and vice versa. Some of the most rapid economic growth in the west happened between WW2 and 1970, when the top bracket rate was as high as 70% in some places.

Economic growth has a lot more to do with how educated the workforce and population is than tax policy.

The problem is everyone seems to think the pain should be endured by someone else.

Raise the rates for everyone based on their tax braket and the graduated tax formula. Cut spending too... across the board.

Edited September 7, 2011 by dre

[Bonam]

Those numbers don't include state taxes. Raising it to 70% would exceed 100% of income. Doubling it is the maximum remotely feasible.

http://blogs.wsj.com/wealth/2011/04/11/can-taxing-the-rich-erase-the-deficit/

Your linked article states that it would amount to 85% of income (not exceed 100% of income) in high tax states...

[TimG]

We have seen low enemployment rates during relatively high tax rates and vice versa. Some of the most rapid economic growth in the west happened between WW2 and 1970, when the top bracket rate was as high as 70% in some places.

I don't think examples from the bygones days when almost all global GDP was produced in wealthy countries are useful. Times have changed. The best way to promote growth is to close the gap between spending and revenue by spreading the pain across the entire economy.

[TimG]

Your linked article states that it would amount to 85% of income (not exceed 100% of income) in high tax states...

I dont know what the federal rates were 50 years ago. I am assuming they were less than 40% for the top income earners. Maybe I am wrong.