<p>It’s very surprising to me that small business owners would be protesting. In my area, they are exactly at the income level that would be hardest hit by this cavalcade of envy. I am fortunate to work for the rich. I don’t envy or begrudge them because it’s their drive, risk-taking and other gifts that allow the partnership to provide good jobs for several hundred other people.</p>
<p>I still think we can come up with better solutions for boosting the middle class… higher taxes on the rich just doesn’t seem viable.</p>
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<p>But it sure makes for a great mantra</p>
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<p>I am not blaming the poor for being poor, I am blaming them for being ungrateful. If you compare all the free federal government services they receive verses what they pay in income taxes, they ought to be grateful that there are rich people who work very hard to make profits and enable them to pay the taxes and go to these crybabies.</p>
<p>zooserman, re: those small business owners that are protesting, they are in industries that appeal to middle-class workers-bar owners, restaurant owners, architects. They don’t benefit from the unemployed workers. Their money is not tied up in stocks and bonds, but in their own companies.</p>
<p>Tax rates can be very complicated because there can be a big difference in what the stated rates are and what people actually pay. But for illustration’s sake, here are the 2011 rates for married filing jointly:</p>
<pre><code>10% on taxable income from $0 to $17,000, plus
15% on taxable income over $17,000 to $69,000, plus
25% on taxable income over $69,000 to $139,350, plus
28% on taxable income over $139,350 to $212,300, plus
33% on taxable income over $212,300 to $379,150, plus
35% on taxable income over $379,150.
</code></pre>
<p>The thing to keep in mind is no one actually pays these rates on their full wages because we nearly all benefit from some type of deductions and credits (mortgage interest, personal exemptions, dependents, charitable contributions, etc), which brings our taxable income down.</p>
<p>What Warren Buffet was trying to say is the average person earns most of their income via wages. The above rates apply to ordinary income. Most millionaires (not just high-income earners) make the majority of their income via capital gains. On short-term capital gains the rate mirrors that of ordinary income. However, on long-term capital gains and dividends the top rate is 15%. So, yes, you could have someone who is very wealthy paying less tax as of a % of their income than someone who makes $100,000 in ordinary income. This is why Warren says he pays a lower tax rate than his secretary.</p>
<p>My husband is a tax accountant, he sees this all the time. He sometimes comes home furious about it because he has wealthy clients who pay very little in taxes. However, it’s his job to help his clients minimize their taxes to the extent the tax code allows and he’s a really great accountant.</p>
<p>I guess I haven’t been paying attention to the Wall Street protesters very carefully. I thought they were protesting the fact that Wall Street pretty much controls our government these days as well as the corruption and greed that take place on Wall Street.</p>
<p>I’m slowly coming to the conclusion that this country is about to undergo great social unrest and upheaval. Anyone else think that also?</p>
<p>“I’m slowly coming to the conclusion that this country is about to undergo great social unrest and upheaval. Anyone else think that also?”</p>
<p>I would have to agree. But I also wonder whether the protesters think that Wall Street is so powerful that only fixing Wall Street can fix our problems. Like I said before, I would like to understand the protesters a bit more before drawing conclusions. I think the media needs to bring their concerns to light and allow their voices to be heard the same way other large gatherings of people have been heard . . . like the Tea Party for example.</p>
<p>[The</a> Dissenter](<a href=“http://dissenter.firedoglake.com/]The”>http://dissenter.firedoglake.com/)
Starting to get more attention.
[AFL-CIO’s</a> Trumka Hails Occupy Wall Street | The Nation](<a href=“http://www.thenation.com/blog/163737/afl-cios-trumka-hails-occupy-wall-street-protests]AFL-CIO’s”>http://www.thenation.com/blog/163737/afl-cios-trumka-hails-occupy-wall-street-protests)</p>
<p>I haven’t carefully combed over all the thoughts here, but have not seen any mention of a “jobs program” - related to the WPA of history. All the collected funds from, yes, “the rich” PLUS all the thriving corporations that somehow get out of paying what they owe, could be used towards job creation in the form of jobs programs. </p>
<p>Some countries have very high employment. When you visit them, you see a very high level of service, because they have so many employees on hand to get things done. I’m thinking of sectors such as public transportation, in which private companies may run the systems, but probably are subsidized by the federal governments. </p>
<p>It just goes against the grain of so many Americans for the government to provide quality of life enhancements to the citizens. </p>
<p>But the middle class IS, in a sense, created by the government. When capitalism goes too far, you have what we are seeing now.</p>
<p>
As to the deficit, a few basic facts are helpful. First, it’s important to understand that our deficit isn’t primarily due to a “spending problem”, it’s mostly a “revenue problem.” How can that possibly be, given the often and loudly repeated insistence on the opposite? </p>
<p>Look at the objective, historical facts: “On-budget” federal spending for the 2010 fiscal year was 20% of the nation’s GDP; the estimate for FY 2011 is 22% <a href=“http://www.gpoaccess.gov/usbudget/fy12/pdf/BUDGET-2012-TAB.pdf[/url]”>http://www.gpoaccess.gov/usbudget/fy12/pdf/BUDGET-2012-TAB.pdf</a> - go to pages 24 and 25. On-budget essentially means everything except Social Security.) That’s above the post-WWII averages, but not by a lot. During the Reagan years spending was 18% of GDP; the post-WWII average is close to 17%. Considering we’re currently involved in 2 1/2 wars and spent a bundle on stimulus projects, that’s not particularly startling. On the other hand, on-budget revenues, which averaged over 15% of GDP from 1950 to 1980, and worked back up to that level again during the Clinton years, dropped to the 11 - 12% range in the early 2000’s and are between 10 and 11% now. So while a 10 - 20% reduction in spending would put us in the normal post-WWII range of federal government spending, we need to boost revenues by 40 - 50% to get government revenue back to the levels which prevailed when we had a healthier economy. I understand that (targeted) tax cuts are simply another form of stimulus, and you can argue the relative effectiveness of tax cuts and stimulus spending; but to get back to normal, it’s clear that more needs to be done to raise government revenue relative to GDP than to decrease spending. Yeah, I know, that heresy, but based on objective historical fact, that’s the way it is.</p>
<p>So how do you raise revenue? Well, 1% of Americans own 40% of the nation’s wealth. The next 9% own another 45% of America’s wealth. 40% of Americans have zero or negative net worth. Where would you look for the revenue needed to operate our public services?</p>
<p>Well, that will fix our government.</p>
<p>But, fixing our government will not fix our economy.</p>
<p>I’d be interested in a poll of posters on this thread, about what “wealthy”, “rich”, and “middle class” means.</p>
<p>In my simplified understanding of it, I have been “wealthy” for the last 10 years, but I don’t seem to have the “loopholes” mentioned in this thread, and instead it seems I am excluded from most deductions. And since I’m self employed, my taxable income doesn’t seem to max out at 33+7.5% either. I cant easily relate it to 30 years ago, because I wasn’t. “wealthy” until more recently. </p>
<p>I know, I should read more of the links, and I’m very grateful, so don’t hate!</p>
<p>My personal feeling is that you’re not “wealthy” unless you have unearned income of at least $250K per year. If you’re earning most of your income you’re not wealthy (although if you earn enough and are reasonably prudent you should become wealthy in time.) Income isn’t wealth. That’s what makes a lot of these discussions confusing - people conflate high-earners with the truly rich. A couple who are both doctors or lawyers can easily earn a mid-six figure income during their prime earning years but they could still have a modest net worth and I wouldn’t consider them to be “wealthy.”</p>
<p>Whew! Good! I think…</p>
<p>^I agree. There are high income earners and then there are those who have accumulated a lot of wealth. Many high income earners never accumulate much wealth and some middle class people amass quite a bit. Read “The Millionaire Next Door”. It’s a real eye-opener.</p>
<p>This protest is about positively CLUELESS people spending their time being…clueless. </p>
<p>Apologies if any posters are communicating via smart phones while camping on Wall Street.</p>
<p>As Wolfgang Mosbach, a high ranking German Conservative, said recently about the mess in Europe (as Germany considers yet another bailout): </p>
<p>“The first medicine didn’t work, and now we are simply doubling the dose.” </p>
<p>Socialist policies got Europe into the mess it is in now. Yes, European systems were a goal of many until recently. Now it is obvious to all but the particularly myopic few that you can run out of other people’s money while sitting at a European sidewalk cafe just as easily as you can here at home. </p>
<p>The way to wealth and jobs is not through class warfare.</p>
<p><a href=“http://www.realclearpolitics.com/video/2011/09/30/warren_buffett_does_not_endorse_buffett_rule.html[/url]”>http://www.realclearpolitics.com/video/2011/09/30/warren_buffett_does_not_endorse_buffett_rule.html</a></p>
<p>My personal feeling is that you’re not “wealthy” unless you have unearned income of at least $250K per year.</p>
<p>We have a definition of " wealthy" - do we have a definition of middle /low income?</p>
<p>The above link: Warren Buffett Does Not Endorse WH’s “Buffett Rule”</p>
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<p>Interesting. So, as far as gov budget balancing is concerned, a 10-20% reduction in spending would be historically consistent… but shouldn’t it actually be further reduced since debt levels are so much higher? What do you think about that?</p>
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It could actually make a big difference. The sluggish economy is due to low levels of overall demand… there’s extremely low confidence. Corporations actually have more cash than ever but this political situation is spooking everyone from spending/taking risks. Look at this chart:
<a href=“http://static7.businessinsider.com/image/4e80761769bedd355a00003d/chart.jpg[/url]”>http://static7.businessinsider.com/image/4e80761769bedd355a00003d/chart.jpg</a>
As you can see, corporations have more than recovered… the trend line from before 2008 has continued upward virtually untouched. They literally have never had so much money in the history of the US, but it’s just lying around! I don’t think we should tax that, since US corporate tax rates are already high compared to other similar countries. Instead, they might spend it on their own if the political climate was more stable. Unfortunately that includes Europe…</p>
![http://static7.businessinsider.com/image/4e80761769bedd355a00003d/chart.jpg[/url]](http://static7.businessinsider.com/image/4e80761769bedd355a00003d/chart.jpg%5B/url%5D){kind=link}
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The problem is, if you cut the parts of the budget which put money in the hands of the middle class - construction projects, government jobs, etc. - you’ll hurt the economy. Part of the reason the economy is so bad is because everyone is waiting for somebody else to make the first move. The middle class isn’t spending because they are afraid they’ll lose their jobs (or have already.) Business isn’t spending because business is bad because the middle class isn’t spending, etc. That’s the logic behind government deficit spending during economic downturns - it “primes the pump” so to speak by creating economic activity with borrowed money. Our problem now is that we’ve been doing that non-stop since 1980, with the exception of the Clinton years, with the result that we were further in debt than we’d been at any time since WWII when the current severe recession hit. We should not have been running deficits in the late 80’s and in 2003 - 2008, but we did anyway. (Arguably the relatively mild recessions of the early 1980’s and post 9/11 might have justified short-term deficit spending.)</p>
<p>But we probably should be running a deficit now, to get the economy moving faster. Cutting government spending now would just worsen the recession and possible send us into a death spiral to the 1930’s. Talk about an unstable political climate!</p>