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Turns Out Most of the 53% are Victims Too

6:01 pm in Uncategorized by Omnipotent Poobah

Mitt Romney thinks almost half the nation is a bunch of crybaby, irresponsible victims living on the public dole rather than paying their own way. To his way of thinking, asking the wealthy to pay taxes to carry their freight is at the center of a class war that persecutes the rich.

Mitt, consider yourself lucky, there is a move afoot in France to up the tax rate on the wealthy to 75%. If you want persecution, move yourself and your money out of the U.S. and into that cute little winery in Provence you’ve had your eye on.

According to the San Jose Mercury News, the states with the highest taxes on the wealthy also have the highest per capita number of millionaires. As Mitt knows first-hand, apparently hiding your money in the Caymans is preferable to actually moving there.

This statistic seems odd when the conventional Republican wisdom is that higher taxes on the wealthy will lead to a mass exodus to escape the unfairness of it all.

California, with the second highest “millionaire tax” in the nation at 10.3%, has a statewide proposition pending to raise the tax rate on the wealthy to an outrageous 13.3%. The bulk of the money would go to schools that benefit the wealthy by training workers they now import from overseas because they claim they can’t get them here. I believe you call this “growing jobs”. Some of the money would go to fixing Third World style roads on which you drive your limos and cutting the debt you so decry.

As a point of reference, I ain’t no millionaire and 13.3% is considerably less than what I pay.

Unlike Mitt, I can’t throw a few extra dollars the Mormon Church’s way to lower my “burden”. I don’t make enough. Still, I throw plenty at places where it goes to feeding and housing ultra-low end 47 Percenters rather than casting big-ass, tax-free gold statues of the angel Moroni.

I can’t move my vast financial empire to the Caymans or into Swiss bank accounts. I don’t make enough. My wife does own two horses, one of which is permanently lame and the other for sale. Neither is an Olympic dancing horse.

I do take a miniscule deduction on my almost paid off mortgage. I’d guess that Mitt’s write off on, say, a Malibu Barbie Ann beach house, financed by a below market, low-interest loan from Bain, would be considerably larger than mine.

So California wealthy people, stop carpet-bombing the rest of us with ads foretelling financial Armageddon if you pay a 3% tax increase which, because of your available tax dodges, will amount to an actual increase of almost zero. If you haven’t run away from such a dastardly and onerous imposition already, I’d guess you wouldn’t now.

BTW, don’t worry about skipping out on your share. I’m sure my higher taxes will make up the difference. I wouldn’t want you to lose sleep over it.

It looks like most of the 53% are victims too.

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

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

BANG! You’re Very Poor

6:18 pm in Uncategorized by Omnipotent Poobah

The Old Homestead

THE OLD HOMESTEADIt’s not my grandparents’ shack, but it is a close facsimile. If Mitt Romney would live in a place like this for a week, I’d vote for him.

Much has been said about how multi-millionaire candidates relate to the middle class. Most of them advize Americans who are part of the shrinking middle class to simply get new  jobs. They’re understandably silent on just how to pull that off in the recession they’ve created. In their opinion, any grousing from Americans caught in the vice of diminishing means is just class warfare against the wealthy, Cayman Island, tax-dodging, outsourcing, politically powerful. BANG! You’re very poor.

No Rusty Iron Spoons for Mitt

Candidates, as often as not, speak as though the very poor don’t even exist. Much like their notion that gay soldiers didn’t exist unless you asked if they were gay. And when they infrequently talk of the working poor, it’s usually along the lines of Mitt Romney’s statement that he doesn’t worry about them because they have an adequate safety net. Fine words from a man not born with a rusty iron spoon in his mouth.

I’m very lucky. I started as a marginal middle class blue collar worker and made my way up with a lot of luck and the ability to know to jump ship when I heard the deckchairs scraping. These days, I defy the odds as an upper middle class man with a nice house, good job, health benefits, and enough money to fund a retirement and buy most anything I truly want or need (not yachts and airplanes and multiple summer “cottages” in Vail you understand) without stretching too much.

My parents were more middle-middle class. They were acutely aware that money didn’t grow on trees.  My father was one of those grossly overpaid civil servants you hear so much about these days. Even though he was lucky to have his job, his “overly generous benefits” didn’t cover my mother’s and grandmother’s schizophrenia or my sister’s bipolar illnesses. In fact, it didn’t pay for most extras and most of the disposable income was already disposed of when the check arrived.

But, just because I led a modestly middle class life doesn’t mean I’m inexperienced in the lives of the very poor.

Meet My Grandparents

Trans-Allegheny Lunatic AsylumThe “safety net” mental hospital where my grandmother spent decades. 

Meet my grandparents. They lived a life straight out of the mid-1800s. My zero grade school grandfather had no steady job because in the backwoods of the Appalachians, there weren’t any, steady or otherwise.  And my grandmother, similarly uneducated and dogged nearly all her life with multiple incarcerations in a state mental hospital that was every bit as scary as those in the mid1800s.

I know. I visited her there many times and heard the screams of the “patients” and the stink of their urine while she slowly rocked in a chair almost comatose from medication.

They lived in a leaking tar-paper shack one step removed from a cardboard box. Heat and cooking fuel came from wood cut a ½ a mile up a steep embankment. During a particularly bad winter they burned one of the rooms of the house because they couldn’t reach the wood pile in hip deep snow.

Drinking water came several times a day from a hole in the ground by bucket and drunk with a community ladle. They bathed and washed clothes in a small creek, polluted from mine waste, behind their tar-paper manse. The outhouse was nearby where, yes, they used actual Sears catalog pages. It was a 2-holer though. They lived over a hole of luxury.

They owned a small “farm” with soil so poor they grew only potatoes and cabbage – everything else died. Meat came from the occasional chicken that stopped laying and daily hunts for squirrel, raccoon, and possum.  Once, my uncle even downed a bobcat. After my mother dropped out of school in the 8th grade to help support the family she vowed never to eat another ‘coon. And, she never did.

They Day Electricity Came on the Back of a Mule

I’m 57 and remember when electricity arrived in the holler. It came from the road a mile away and strung from the back of a mule slipping and sliding down the almost impassable slope. It dangerously provided one light fixture with no switch in a house without wiring. You unscrewed the bulb to turn it off.

The closest telephone was a mile away at Speed’s General Store. Because of the snow, winter calls were impossible.

There’s more, but you get the essence.

From them, I learned much about the lives of the very poor. It’s easy for people like Gov. Romney to call safety nets with holes so big millions of people fall through them “adequate”. It’s easy for the fast-disappearing middle class to ignore these people…until they’re outsourced and suddenly find the safety net not nearly so safe as they thought.

I’d like to think I would be more compassionate than them, but without that experience I possibly would have been as blind to the “have nots” as Romney and the Tea Partiers (BTW, I don’t think my grandparents ever drank a cup of tea. They couldn’t afford it).

Just Another Muttonhead With Slicked Back Hair

I may not have had the privilege of seeing the back-breaking labor that stood between my grandparents and, in some cases, death. It would have been possible that I could never have fathomed a life that poor. That deprived. I’d like to think I wouldn’t turn into just another muttonhead with slicked back hair, a limo, and a gold spoon hanging from his mouth. But there for the grace…

I’m willing to vote for anyone in any party if, for once, they’d go live like my grandparents, or in the projects, or under a highway overpass for a week. I’d like to give them a sense of what an “adequate safety net” means.  Just once. Just once.

Gov. Romney, my vote is yours for the taking. I’ll vote for you if you have the courage to live like so many other people in this country for only a week – hell, even a day. After that, I’ll campaign for you if you can just define exactly how it is that our safety nets are adequate.  I’m waiting to give my vote to you right now.

Governor?

Cross posted at The Omnipotent Poobah Speaks!