Truth and Traditions

Today, no income above $106,800 is eligible to be taxed, meaning Warren Buffet pays the same amount of payroll taxes as someone making $106,800. At a time when politicians like Romney are sowing hysteria about Social Security going bankrupt, the question about raising the cap to make the tax slightly less regressive and generate more revenue for the system is perfectly logical. And yet, Romney used it as a rationale to lash out.

As if grasped by a moment of yearning nostalgia, Romney responded to the tax-cap question with a seemingly heartfelt lament, saying, “You know, there was a time in this country that we didn’t celebrate attacking people based on their success, and we didn’t go after people because they were successful.”

The Myth of the Persecuted Billionaire is one of the favorite monikers of the larger “Let Them Eat Cake” movement.

via “Let them eat cake!”: Summer edition – Let Them Eat Cake – Salon.com.

The Verizon Corporation is asking its workforce to accept wage and benefit reductions—despite being a very profitable company. Morgan Stanley’s recent analysis shows Verizon’s net income from ongoing operations was $13.9 billion in 2010, up more than 16 percent from 2007. No wonder Verizon’s stock has outpaced that of the S & P index and other telecommunication’s firms, something Verizon itself brags about in its last annual report. How, then, can Verizon freeze current workers’ pensions and eliminate pensions for new workers? Ask their workers to accept reductions in holidays (to seven), reduced sick pay and the substitution of the current health plan with one having high deductibles and contributions? The unions involved estimate that benefit and wage reductions would total $20,000 per worker each year.

Meanwhile corporate profits are doing just fine. Those artificial persons, remember them? Heck, we don’t need robots from the future to wage war on us. Corporate robots are doing it right now.

What we have is  an economy in which businesses and highest-income households do very well even when the vast majority is deeply hurting. Over the last four quarters only 73.7% of the income generated in the corporate sector went to employees in wages and benefits, the lowest share since during World War 2, when wages were deliberately suppressed. Correspondingly, the 26.3% share of corporate output going to profits is the highest since the World Was 2 years.

via Striking Verizon Workers Are an Example to Us All | The Nation.

Warren Buffet shoujld know; he’s one  of the richest of the super-rich.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

via Stop Coddling the Super-Rich – NYTimes.com.