@dfbdfb,
Really? As a corporate shareholder (i.e. an “owner”), I can assure u that the IRS expects me to pay income taxes on stock dividends, after the it already takes its cut from corporate profits.
it’s not economic growth…
it’s the stock market in a huge bubble propped up by the fed that keeps interest rates extremely low, allowing the super rich to borrow money for free and put it in the stock market, which is up almost 200% since it bottomed out in 2009 (and up 50% since 2012)
of course, MOST people do not have money in the market to take “advantage” of this bubble.
A huge number of people who aren’t rich do have a pension fund w a large stake in the stock market. This includes public sector employees, too., e.g., CalPERS
https://www.calpers.ca.gov/index.jsp?bc=/investments/assets/equities/usequities.xml
soccerguy, economic growth worldwide is going entirely to the people at the top-- this is not the doing of the US Fed. Moreover, the top .1 percent are getting way better returns than the stock market. The large fortunes are outearning the stock market, because they can afford to hire the best money managers.
Consider Harvard-Yale-Princeton endowment. They’ve been earning huge returns for the last three decades. From 1980-2010, their real return (after inflation) was a spectacular 10.2% per year. The rich get richer.
I was reacting to the second part of the claim, not the first. Yes, that happens in some cases, but it’s rare enough that it’s simply a canard distracting from the main thrust of this discussion.
Corporations benefit from a whole host of public services (infrastructure, rule of law, sewer, water, educated work force , etc) so they need to contribute to the price of those services. Their owners may or may pay taxes in all the jurisdictions where the corporation benefits from these services. The federal government does not fund most state services. If a corporation wants the benefits of being treated as a “person” it must also take the responsibilities that go along with that designation.
You created the title for this thread:
And then this is what you said in your first post, characterizing Krugman:
So please explain how I was misreading your interpretation of Krugman when I said you implied he thought education was fine and radical income redistribution was necessary.
@"Cardinal Fang"
Of course I’m familiar with Piketty, at least as a media meme, and I have to admit that I am brought up short by the rather elegant argument attributed to him that the average return to capital has exceeded growth for the past couple of decades. That’s a problem. But I think it takes a lot of imagination to see inherited wealth turning our society into Balzac’s or Dickens’ 19th Century. As long as a good job can get you decent housing, abundant food, a car or two, a membership at the Met, high-speed internet, and a shot at educating your children, it doesn’t bother me that much that you may never own a penthouse at some building with Donald Trump’s name on it or a significant Cezanne painting (or even a Jeff Koons).
Actually, CC itself is a testament to a really important form of wealth transfer: paying (or helping to pay) your children’s college tuition, and preparing them to succeed in college. That’s not an absolute dividing line in our society, but it comes awfully close.
I agree with dfb that is not the way corporate taxes work. Corps can stockpile assets and cash with no taxes. It is actually a fairly complex subject.
Actually, it is fairly straightforward to tax those piles of assets or cash. Just intercept them when they are earnings.
Krugman has been one of the few economists whose prediction about the economics of the financial crisis have been inevitably accurate.
@JHS
More misprision?
The title is not the issue; your misprision of Krugman is. Here’s what I wrote earlier:
Has Krugman not asserted his doubts about education having ever been the answer to inequality? Again, why reading between the lines when the words are sufficiently clear?
xiggi, I don’t follow Krugman enough to know whether he thinks that education was “ever” the answer to inequality, or what programs he prefers. What he said pretty clearly in the piece you linked was that education is not the answer to income inequality now. I don’t know what he proposes as the answer, but his piece was not saying that raising corporate taxes was good policy, only that it might actually address income inequality. I don’t disagree with what you wrote today at all.
Buffett said this morning on CNBC that education is not the answer to income inequality.
Well, JHS, perhaps you should give credit to the people who do follow Krugman with closer attention. I happen to think that he is a fascinating person. And as fascinating at the many incredibly talented and brilliant minds who cannot set aside their deep intellectual bias and, may I say, political ambitions.
For what it is worth, I am happy you do not disagree with I wrote today because my text would have set in motion all the plagiarism bells available to TAs at our middling colleges. I borrowed the words --almost verbatim-- from an earlier effort by Krugman.
In the end, based on his repeated positions, I am not sure why it is so hard to assume that Krugman does indeed think that the education is not the answer to our problems of inequity and that the answer IS some form of income redistribution and that corporate taxes and the superior taxation of capital is part of that answer. Interestingly enough, Krugman does look at Sweden with some emotion as the country as indeed “equalized” its citizens but hardly by refraining by taxing … labor over capital.
As far as the locomotive image, that is not quoting Krugman, but my own conclusion of what he stands for. All of us are entitle to opinions, and differences in such opinions do NOT necessarily that we misunderstand the original words. The reality is that all of us tend to read the same text through the lenses of our own education, family structure, and ideas on how to move our country out is slide into mediocrity and morass.
The other reality is that none of the proposed solutions --be it from Krugman or the Know-nothing-- will work in isolation. Krugman is right that education is not working as the ultimate panacea, but only right in terms of the current education that is solidly built on division. The type of education structure our country has adopted is the problem. Some of Krugman’s solution --when he talks about “programs”-- are pointing to training or retraining, but doesn’t that revert to education? Or perhaps a component of education we should have in … our high schools?
Anyhow, we could for months in debates, including circular ones. I will continue to assiduously read Krugman. Sometimes nodding in favor and sometimes shaking my head in disbelief. And continue to think that it is important to read what he wrote, and perhaps more important than listening to his occasional sound bites on national television.
Over time, it is possible that our mutual “misprision” will be a lot smaller than it appears.
^^
Original article:
http://www.nytimes.com/2013/06/14/opinion/krugman-sympathy-for-the-luddites.html
Quoted:
nd the modern counterparts of those woolworkers might well ask further, what will happen to us if, like so many students, we go deep into debt to acquire the skills we’re told we need, only to learn that the economy no longer wants those skills?
Education, then, is no longer the answer to rising inequality, if it ever was (which I doubt).
So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.
I can already hear conservatives shouting about the evils of “redistribution.” But what, exactly, would they propose instead?
It would take less imagination if you read Piketty.
But, briefly, his argument on this subject is that wealth inequality is large and increasing: to put it bluntly, more and more a small percentage of people are owning everything there is to own. Therefore, we can’t assume that your person will continue to own the kinds of things that people like that own now, because the 0.1% are, more and more, getting to own everything.
If you argue that decent housing, food, decent transportation, access to culture, high-speed internet, a shot at educating your children and, I think you’d agree, a decent retirement, are the minimum for fully participating in society, then you should wonder whether these amenities will continue to be available to the majority of citizens as the richest people own more and more of everything. Already the transportation system and the education system are fraying.
Turn that question around. So the only solution to these issues is redistribution? That’s it? The only way to get a middle class is to gift it to them? That’s the only way? Whether a socialist or a conservative, one would have to be a fool to think Robin Hood had all the answers.
@florida26 is right that corporations can stockpile money. But eventually that money is going to be delivered in the form of dividends. BUT, I would ask, why not have a graduated wealth tax starting at perhaps half a percent or one percent annually on wealth above $10 million, and rising to three or four percent on estates above $1 billion? This would force people like Warren Buffet and Bill Gates to pay their fair share.
I just think corporations should operate tax free. Tax the wealth of the shareholders and tax the dividends as income. No need to take the same income twice.
Parent1337: Not to let this thread get too political – which it already is, but at least it’s civil – but I think the answer Krugman et al. would give to your question is really that “redistribution” is in the eye of the beholder. (Of course, that’s not actually the answer they would give; it’s how I am characterizing it.) The right calls progressive taxation “redistribution”; the left calls it apportioning the cost of social institutions based on who is deriving the most benefit from them. The right has what amounts to a religious myth about a free-contract state of nature (with no transaction costs and perfect information, of course), and every government intervention is decried as a degradation of that perfect condition; the left points out that the perfect market has never existed and the existing market plays by house rules that guarantee that the people who own the house are the ones who win, but if that goes on too long then no one will play and no one will win.
A big part of the controversy relates to the source of authority. Defenders of the status quo almost always take the position that the status quo was established by God, or Nature, something extra-human like that. Their opponents tend to locate authority in the People, and if the People rejigger the rules that’s only enforcing a social contract that has been breached without consequence for far too long.
Piketty also advocates for a global wealth tax, but he admits it’s a quixotic idea.
@earlvandorn if you let corporations operate tax free what’s to stop some one from putting all their money into a corporation and never taking it out except upon death. That is the type of tax planning tax attorneys would recommend