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Everyone Wants More

10:29 am in Uncategorized by Omnipotent Poobah

There is a lot of bloviating these days about the rich and taxes, income distribution, jealousy, greed, and class warfare. Most of it uses the 99/1% benchmark. The crux of the argument is that everyone wants more.

The rich want no boundaries on what they want and don’t want to give up what they have, which is reasonable since everyone else feels the same.

The poor have a hard time eating and putting a roof over their heads. They want more, need more, and have nothing to give up. No matter how Ryandian you are with the math, 0-0=0.

No One Knows Who is in the 99%

The middle class mostly wants to hold its own. Of course, they could use more, but they still want to give up less. And more than the other two groups, they are in a crossfire in which they increasingly give up more and get increasingly less. Ironically, even though they are shrinking faster than a Phoenix puddle in July, they hold up both ends.

Yet, the income distribution conundrum has little to do with taxes, greed, jealousy, or class warfare. In fact, it has little to do with the 99/1% benchmark. There are several reasons for that.

First, no one knows who is in the 99% and who is in the 1%. It depends on what you count, how you count it, where you can put it and – to a degree – when you count it.

Income is very different than wealth. Taxable income is much different than the tax you actually pay. At the upper end of the 99% and the lower end of the 1%, small shifts can cause you great vacillation between classes. For example, when a top-end 1 percenter gains or loses big money, the bottom end of the 1 percent start jockeying like Mitt’s NASCAR owners at the start of the Daytona 500. In turn, that ripples through the rest of us. Today a 1 percenter, tomorrow a 99 percenter.

Most upper-enders started with significant educational and economic advantages before they even made their own fortunes. The Horatio Alger story is as rare as 3% interest on savings accounts these days. Ann Romney’s ironing board as dining table story is bunk. Daddy George, who actually was a self-made millionaire, fronted Mitt and Ann the money for almost everything in the early days – including an ironing board, very nice dining room table, and Bain Capital. They haven’t looked back since.

On average, most are self-employed, some are even those “small business owners” (small is such a relative term) you hear so much about. They tend to work more hours, but be paid vastly more than your average burger flipper or machinist. You can judge for yourself whether the number of hours equates to the effort expended.

The main tax argument is a bit of a straw man. If you are wealthy, how much you pay in taxes is governed by how much you make, not your overall wealth. The more you make the more you can hide money offshore or get tax credits for Olympic horses or shutting down a companies. You may have a high tax rate, but chances are the amount you actually pay is a fraction of what your tax bracket suggests. Generally speaking, the more money you make, the bigger that gap gets. Lose more, make more. That’s not illegal, or in some cases, particularly immoral. It just is.

The government can rejigger taxes on the rich all it wants, but the revenue represents a microscopic fraction of what the country needs or the amount the rich can pay. Unlike most of the middle or lower class, permanent residents of the 1% don’t invest their money in living expenses anyway. Within a very short time, most of them will recoup what they lost many times over and become increasingly likely to pay even less tax. That’s why General Electric pays no taxes while Joe’s Pizza pays a lot.

People Become Richer Because They are, Well, RichNo, people become richer (and move up the economic food chain) because they are, well, rich. Because the wealthy aren’t paying underwater mortgages or worrying about health care, they have a lot of disposable income.

A chunk may go for a summer home (or three), or if far into the wealthiest bands, yachts or private jets. But even those expenditures are usually a fraction of their disposable income. Except for those at the very top, everyone has enough expenses to have some sort of budget. A rich guy who buys too many Lambos or one too many beach houses will find himself broke just as surely as a budget breaking, middle class guy with a 10 year old car who can’t afford a trip to the beach – even if he lives in Daytona.

Where does all that disposable income go? Straight into investments. Investments that generate more money that is reinvested to generate more money and so on ad infinitum. That cash engine – which at a corporate level was a GE ex-CEO Jack Welch concept – widens the income disparity by leaps and bounds. The rich don’t just get richer; they get monumentally richer…very fast. Along the way, not all that money necessarily creates jobs. It creates people rich enough to control companies. And, their primary interest is making more money, not keeping a plant open.

Many companies currently sit on huge wads of cash. They don’t create jobs because the people who largely own them lose money – at least initially – if they spend the money.

So as you listen to all the cacophony about jobs and taxes and class war, remember that none of those things mean very much – be you Democan or Republicrat. There are few jobs because there is no economic incentive to create them, even in the much vaunted, unfettered, “free market”. Because of the vagaries of our tax system, raising taxes actually turns a profit sometimes. And finally, the rich aren’t doing anything special or illegal; they just want what everyone else wants…

Take in more, pay out less.

Cross posted at The Omnipotent Poobah Speaks! More than politics, more than pop culture & humor

When the Upper Class Becomes Victim to Class Warfare

1:41 pm in Uncategorized by Omnipotent Poobah

To hear the 1 percenters and those 99 percenters bent on voting against their own economic self-interests tell it, you could slap a bushy beard and crazy wig on Barack Obama and he’d be the new Karl Marx. That Karl Marx could take a Viennese sachertorte-sized chomp out of their ass and they wouldn’t know him is beside the point.

Banner: Rich Scum Beware Class War

Photo: r.a. paterson / Flickr

Even Karl or Barack tarted up like Karl know most people in a society must work to live and the oligarchy needs workers to keep their class alive. Barack Obama, Mitt Romney, and rich people don’t create jobs – only other people with jobs create jobs.

Many Americans don’t have jobs because the upper class is so greedily incompetent they are ruining things for everyone, including themselves. They want to remove regulation falsely thinking they can trust each other to do the right thing. But capitalism is an economic system based on greed and hoping greedy people will also be honorable people is counter-intuitive, stupid, and criminally naive.

Cheapster Pixie Gods, Magic Job Creators

The upper classes also believe they are magic job creators – cheapster pixie Gods who can live tax free, transfer all their money to the Caymans, and send all the American jobs overseas yet still create jobs. That is why the nonpartisan Tax Policy Center says Mitt’s economic plan is “mathematically impossible“. It relies on hopelessly optimistic tax and employment rates coupled with insane budget deficit reductions.

Folks without tax accountants to find ways to avoid taxes and balance clients’ checkbooks, can tell you that if little money comes in and all the money left goes to essentials like food and a roof, the checkbook won’t balance…ever…not even if you cut everything except the food and roof.

If you aren’t working, all the money disappears fast and if you can’t find a job, it isn’t coming back. This is not called bankruptcy. This is called up Homeless Creek without a paddle and heading over the lip of Niagara Falls.

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One Percenters Have the Most to Lose

12:43 pm in Uncategorized by Omnipotent Poobah

The Middle Class and the LionsGOLDBRICKERS – It’s easier to not care about jobs when you already have one.

Tea Partiers often cite the inability to cut budgets through the bone and still run the government on drill baby, drill fumes as a cruel thing to foist on future generations. While we need to cut expenses, the more important task is creating jobs with livable wages – not the French frying legion of Rick Perry’s Clown Star economic miracle nor the too-small-to-live businesses so poorly run and under-capitalized they can’t afford to pay them.

As the OWS uprising shows, 99 Percenters are fed up with economic policies that benefit the few at debilitating cost to the many. New polls show the even the 99 percent are in the throes of economic balkanization among themselves. The income disparity between subgroups that help define the 99% and America’s greatest contribution to the global economy – a sustainable middle class -  show a clear and present danger that taxes will be the least of the next generation’s worries. Read the rest of this entry →

The New LaManchas

11:43 am in Uncategorized by Omnipotent Poobah

Flip Floping Romney

FLIP FLOPPER - Apparently Mitt Romney has as much fidelity to his "principles" as John "Flapjacks" McThusela.

Opinions are like bandwagons, everybody has one. Almost all opinions have a grain of truth at their core, but you have to winnow through a lot of crabgrass to get to it.Many people like to compare the Tea Party to Occupy Wall St. I’m sure it’s a delight for the pundits to debate themselves on innumerable news programs and shout fests, but it doesn’t mean much right now. The situation is simply too fluid to predict where it will go.

One notion says the Tea Party is a laser-focused group of very loud Stepfords harping on taxes, healthcare many of them already accept, and the Obamunist. They applaud anything that agrees with their Pollyanna view and boo anything that doesn’t. By contrast, OWS (there’s an unfortunate abbreviation for you) is a complete rabble of hippies and drifting malcontents that don’t have a cogent message, much less a strong organization culture. They might possibly be Communists or, worse yet, liberals.

Militant Librarians

MILITANT LIBRARIANS - Hell hath no fury like a librarian scorned.

The profile of your average Tea Bagger is quietly in flux. Some of them want limited protest and unquestioning adherence to their own ideology. Some are hammering in a religion plank and are thrilled with Rick Santorum and Michele Bachmann, the goofiest two candidates who have personal speed dials for God. Mitt Romney, of course, can’t stand on that plank because he belongs to a cult/non-cult called Mormonism. They’d vote Muslim before they’d vote for that quasi-Christian poseur. At least Muslims look different so you can always see their evil or require their papers.

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