Summers: U.S. risks becoming a Downton Abbey economy


"The U.S. may well be on the way to becoming a Downton Abbey economy," Larry Summers writes in the FT, due to the increasing share of income "going to the top 1% of earners."

However, "it is not enough to identify policies that reduce inequality," Summers says. "They must also raise the incomes of the middle class and the poor."

Summers identifies tax reform as having a major role to play. "Closing loopholes that only the wealthy can enjoy would enable taxes to be cut elsewhere," he writes.

Summers also argues that market forces should be used to address inequality. "Policies that aim instead to thwart market forces rarely work, and usually fall victim to the law of unintended consequences," Summers says.

Comments (96)
  • Van Hyder
    , contributor
    Comments (172) | Send Message
     
    That sounds all wonderful until you start digging a little deeper. If you google tax loopholes of the wealthy you're not going to find very much. It's really down to owning companies and writing off expenses and dividend & capital gains tax treatments. So what do you think Summers is talking about changing on the wealthy's tax forms?
    17 Feb 2014, 09:07 AM Reply Like
  • SimonSaysShort
    , contributor
    Comments (116) | Send Message
     
    Haha, you expect to find strong tax loopholes via a google search? I don't think the people who are taking advantage of tax loopholes are big into blogging about it.
    17 Feb 2014, 09:12 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    I'm going to believe Van Hyder was just being sarcastic the alternative is scary.
    17 Feb 2014, 11:56 AM Reply Like
  • kmi
    , contributor
    Comments (4558) | Send Message
     
    Forget loopholes. Just take 5 minutes to hit the IRS website. There's a section where you can find all the ways you can tax shelter money.

     

    Take a two income household, and start adding it all up, IRA, 401k, 529s, etc... The number gets pretty big, so that a household taking advantage of and applying all the various legally permissible - non-loophole tax shelters could be making several hundred thousand dollars and paying the same dollar amount in taxes as a household making the median household income for the country and not sheltering any of it (because they damn well can't afford to).
    17 Feb 2014, 12:14 PM Reply Like
  • Bear Bait
    , contributor
    Comments (911) | Send Message
     
    google didn't get to be one of the worlds most recognizable names by searching just blogs.
    17 Feb 2014, 02:42 PM Reply Like
  • Captain Pike
    , contributor
    Comments (890) | Send Message
     
    Good ol Lar has one heck of a short or convenient memory! It was the stifling of the work of Brooksley Born that caused the collapse and led to a widening of that inequality that makes the downton abbey economy. ........................ lololololol

     

    http://to.pbs.org/195Yn5o
    17 Feb 2014, 09:12 AM Reply Like
  • slash32is4
    , contributor
    Comments (255) | Send Message
     
    its all about decisions people make... maybe the Gov should force people to spend their money on things the Gov wants them to buy like Obamacare does except call it "Started from the bottom now we here" and it forces people to save money (living with roomates having a cheap phone plan going without cable tv and etc) and buy income producing assets it would be better in the long run than Obamacare lol
    17 Feb 2014, 09:18 AM Reply Like
  • deercreekvols
    , contributor
    Comments (9398) | Send Message
     
    A "Downton Abbey" economy...I guess I should start raising pigs. (those who watch will know)
    17 Feb 2014, 09:22 AM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    ...you mean you have to water them everyday? Must be an analogy there somewhere.
    17 Feb 2014, 09:56 AM Reply Like
  • Bret Jensen
    , contributor
    Comments (13647) | Send Message
     
    Given that the biggest income disparities between rich & poor are in deep blue states (CA, IL, NY, CT, MA, etc...).....obviously progressive policies do not work as well as conservative ones (TX, TN, etc....) despite their stated 'good intentions'....
    17 Feb 2014, 09:27 AM Reply Like
  • chriff
    , contributor
    Comments (117) | Send Message
     
    Bottom 10 states by Gini coefficient (ie, higher inequality):

     

    Mississippi
    Tennessee
    Texas
    California
    Alabama
    Florida
    Louisiana
    Massachusetts
    Connecticut
    New York

     

    Not only are BOTH TX and TN on the bottom of the list, unlike you claim, but the deep blue states that are also down there (CA, MA, CT, NY) just happen to be places where rich people really like to live. Check your sources and accept reality from time to time.
    17 Feb 2014, 09:54 AM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    not sure what source you used , but here is another list that looks pretty red
    ??? TX is 3rd worst for inequality (Gini Coefficient: 0.474), and not sure I'd use TN as a standard for most anything
    http://bit.ly/N2S92f
    17 Feb 2014, 10:03 AM Reply Like
  • Bret Jensen
    , contributor
    Comments (13647) | Send Message
     
    You have bad data there......most disparity in order D.C, NY, CT, MA....least in order Utah, Alaska, Wyoming.....you were right that TX or TN were not in top half but still better than these big blue states...Here is the full list for any that want to look.......http://bit.ly/1oHnWEM
    17 Feb 2014, 10:15 AM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    ...let's just say there's more than one way to skin the data. But at least we talking about the inequality issue. Kinda surprised you're using Wiki as a source, but here's another interesting graphic for where the big cities have a wide gap...
    http://usat.ly/1chmFPn
    17 Feb 2014, 11:13 AM Reply Like
  • SimonSaysShort
    , contributor
    Comments (116) | Send Message
     
    Woah, you mean the super rich aren't flocking to Utah, Alaska or Wyoming?! Shocking!
    17 Feb 2014, 11:25 AM Reply Like
  • optionsexpert
    , contributor
    Comments (482) | Send Message
     
    Nothing like some good confirmation bias.
    17 Feb 2014, 11:30 AM Reply Like
  • joro_ianev
    , contributor
    Comments (400) | Send Message
     
    Is he talking about the inequality between government workers and the people that pay their bloated wages & benefits?
    17 Feb 2014, 09:28 AM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    The solution is simple, we need more people who pay zero tax. My proposal is that only the top 1% pay any tax and the remaining pay zero tax.

     

    Then when the 1% all move out of the country watch the fun begin.
    17 Feb 2014, 09:29 AM Reply Like
  • Jake2992
    , contributor
    Comments (1084) | Send Message
     
    And go where? Europe? Good riddance to the plutocrats if they do leave. Let them ruin some other Democracy.
    17 Feb 2014, 06:35 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    Vastly reduce transfer payments and watch the economy soar.
    17 Feb 2014, 09:43 AM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    "Why isn’t capitalism working?"
    http://reut.rs/N2QTw5
    17 Feb 2014, 09:53 AM Reply Like
  • joro_ianev
    , contributor
    Comments (400) | Send Message
     
    wait, we have market capitalism in the US?!? What a drivel of an article. Typical of a government bureaucrat.
    17 Feb 2014, 12:00 PM Reply Like
  • 395308
    , contributor
    Comments (100) | Send Message
     
    They provide us jobs !... working in their stables...
    17 Feb 2014, 09:55 AM Reply Like
  • Archman Investor
    , contributor
    Comments (3296) | Send Message
     
    LS: one of the biggest players who took part in the dismantling of regulations & one of the biggest players who has made sure the rich get richer. Denial: now that's a word.

     

    Warren Buffet once said that if all the major corporations paid their true fair share of taxes and were not allowed to keep their money hidden overseas, there would be no need for the personal income tax in this country.

     

    The reality is: People like Summers love their sound bites while on the other hand laying in their huge bed of money at night.
    17 Feb 2014, 10:03 AM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    Archman

     

    Buffet? You can't be serious. He employs armies of lawyers and accountants to make sure his companies don't pay their fair share.
    17 Feb 2014, 10:23 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (706) | Send Message
     
    I am slightly behind Buffet in terms of total wealth … and the ability to create it, but I disagree completely with his assertion regarding corporate taxes. Corporations do not pay taxes; period.

     

    If the Federal Government imposed a new 5% tax on corporate earnings, I would expect to pay more for their product to cover that new ‘corporate’ tax. Any way you look at it, consumers pay all taxes. Yep, great sound-bite but that’s about it.

     

    If the government would ever attempt to do something like that and eliminate personal income tax, they would essential be creating a consumption tax. When the economy goes south and people tighten the purse strings, what’s Uncle Sam going to do then?

     

    Never mind, I guess they could always print more money.
    17 Feb 2014, 10:34 AM Reply Like
  • Archman Investor
    , contributor
    Comments (3296) | Send Message
     
    Wystocks:
    Not disagreeing with you. Buffet likes to say one thing and do another as well. I was just repeating the statement he has made in the past. Though he states one thing, we all know he does not want anything to change.

     

    Let's face it: Once you start getting a taste for some real wealth you definitely like the way it feels and do not want to give it up.
    17 Feb 2014, 10:43 AM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    Archman

     

    We agree. Buffet has the best PR department in all of the business world.
    17 Feb 2014, 10:47 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    "Do as I say, not as I do"

     

    ----------- Warren Buffett.

     

    http://bit.ly/1gc1kpF
    17 Feb 2014, 11:57 AM Reply Like
  • Bear Bait
    , contributor
    Comments (911) | Send Message
     
    is "give it up" synonymous with share.
    17 Feb 2014, 11:59 AM Reply Like
  • joro_ianev
    , contributor
    Comments (400) | Send Message
     
    Corporations do not pay income taxes?!? C'mon man, get real. At least do a quick search before posting such nonsense.
    17 Feb 2014, 12:04 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    The reference to Corporations not paying income tax, mostly refers to the likelihood that they must add it in to the price of their products, which ultimately trickles down to the end consumer, not much unlike sales tax.
    17 Feb 2014, 12:18 PM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    They don't, joro. They are merely tax collectors.
    17 Feb 2014, 12:28 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (706) | Send Message
     
    justaminute, ... precisely.
    17 Feb 2014, 01:27 PM Reply Like
  • Jake2992
    , contributor
    Comments (1084) | Send Message
     
    The fairy tale about corporations not paying taxes has been debunked. Of course corporations pay taxes, if they didn't, they wouldn't go through all the trouble of hiding their stashes. Corporate taxes are levied on profits that is why they can't pass costs on to consumers after and why they oppose corporate taxes.
    17 Feb 2014, 06:41 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    They oppose corporate taxes, because it make their products more expensive to the end user, thereby reducing sales & their margins, which reduces profits and taxes on future potential profits. And so on, so on........ Which reduces demand, for their hiring etc, etc..... and so on...

     

    which reduces growth, and so on, and so on.....

     

    That's why
    17 Feb 2014, 06:51 PM Reply Like
  • dancing diva
    , contributor
    Comments (2718) | Send Message
     
    It's Buffett's (and all CEO's) fiduciary responsibility to shareholders to use all legal means to maximize profitablility.

     

    Unfortunately the guys who are responsible for changing the tax code are the same ones who need megabucks to get elected and reelected. I think that's why they all pay lip service to our horrible tax code but never do anything about it; it's never a good thing to bit the hand that feeds you.
    17 Feb 2014, 08:29 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Is it Buffett's responsibility to promote the Buffett tax?
    All while fighting the IRS to reduce his own? Which is fake BTW
    17 Feb 2014, 08:33 PM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    jake

     

    "Corporate taxes are levied on profits that is why they can't pass costs on to consumers"

     

    This foolish statement shows how little you know. You don't invest money in the market do you?
    18 Feb 2014, 03:42 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2064) | Send Message
     
    Pushing for higher tax rates within the economy as a whole would be against that duty, apparently.
    18 Feb 2014, 09:34 AM Reply Like
  • Tommy the Cork
    , contributor
    Comments (78) | Send Message
     
    We're already there : The statist flavor of feudalism, otherwise known as fascism.
    17 Feb 2014, 10:05 AM Reply Like
  • pogoran
    , contributor
    Comment (1) | Send Message
     
    Apparently, Summers doesn't watch Downton Abbey because in this current season the wealthy mansions are starting to disappear due to higher taxation. This shows how little really Summers is in touch with our US economy.
    17 Feb 2014, 10:15 AM Reply Like
  • DianeLee
    , contributor
    Comments (368) | Send Message
     
    Summers statements are loaded with Talking Points, with Downton Abbey thrown in for an attention-draw. We foresee more hearty debates between capitalists and socialists, but...can we maintain some sense of reality? Or, alternatively, we can just continue to trade Talking Points.
    17 Feb 2014, 10:30 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2064) | Send Message
     
    To think that the government would reduce the general population's taxes if they took more from the 'rich' is ludicrous.

     

    Each year the government raises taxes, takes more money in, and then claims to have to raise taxes even more in future years to pay for 'investments'.

     

    The government will never stop taking. They will increase the money supply, tax and spend, push debt payments off into the future, use transfer payments, etc. in order to continue their ponzi scheme.

     

    Madoff went to jail for running his ponzi scheme. Politicians run an even bigger racket, yet they continue to claim legitimacy and good intentions.
    17 Feb 2014, 10:30 AM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    Can someone please explain to me how having the "rich" pay more in taxes will "raise the incomes of the middle class and the poor."

     

    What Summers really advocates is for the government to "give" more to the "poor and middle classes". I can't wait to see him in his new Robin Hood costume.
    17 Feb 2014, 10:43 AM Reply Like
  • Bear Bait
    , contributor
    Comments (911) | Send Message
     
    quite simply; they pay more the middle class and poor pay less.
    17 Feb 2014, 11:49 AM Reply Like
  • Bret Jensen
    , contributor
    Comments (13647) | Send Message
     
    Anyone who thinks our system is not progressive enough should consider. The top quintile of taxpayers get 17 cents back for every dollar they contribute to Federal revenues.....the bottom quintile........$9.62.
    17 Feb 2014, 11:58 AM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    that may very well be true, but when you compare absolute tax dollar expenditures, the top 1% is doing quite well, 8X the botton 20%...that's in after accountant/lawyer dollars. http://wapo.st/MFp2BR
    17 Feb 2014, 12:17 PM Reply Like
  • convoluted
    , contributor
    Comments (2407) | Send Message
     
    When I was a grad student, I wrote a paper entitled "Maldistribution of Income As A Factor in the Great depression." One thing I learned was that I didn't want to be on the 'maldistribution' side. It's not a new issue. It's always been around-except where ruthless dictators looted everybody. And, in those cases, we still see the folks at the pinnacle taking the resources. North Korea is a modern example.
    This can best be studied and understood, not so much by economic theory, but anthropology and psychology. Man has tried communism, socialism and various other isms throughout time. As of yesterday, there was no answer to this testy little issue. Of course, there's always today, and if not today, then surely tomorrow. We all know that 'tomorrow's another day' We probably should have a government agency conduct a feasibility study-that will show we're serious about the whole thing.
    17 Feb 2014, 10:54 AM Reply Like
  • DougRk
    , contributor
    Comments (1896) | Send Message
     
    Govt. has caused the problems, so of course we need more govt. to fix it. So convenient how the left's arguments work.
    17 Feb 2014, 11:15 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1546) | Send Message
     
    Looks like old Larry Summers is trying to remake himself into a liberal. This means only one thing, he is going to try to re-enter public life, God help us all.

     

    Don't fall for it, people -- he may harp on income distribution all he wants, but we should always remember him as one of the main proponents of financial deregulation, and the mess that brought us.
    17 Feb 2014, 11:19 AM Reply Like
  • alf2011
    , contributor
    Comments (536) | Send Message
     
    “A generation ago, it could have been asserted that the economy’s overall growth rate was the dominant determinant of growth in middle-class incomes and progress in reducing poverty,” Summers said. “This is no longer a plausible claim.” (from Bloomberg)

     

    Yes, cutting-edge research in economic thinking has discovered that the determining factor for improving middle-class incomes is growth in taxation and government spending.
    17 Feb 2014, 11:23 AM Reply Like
  • TheeSeer
    , contributor
    Comments (381) | Send Message
     
    When is someone like Summers who is supposed to be an "Expert" level with the American people or are they all so myopic that they can't see the obvious. Here it is. The entire issue of global inequality is caused by worldwide population and demographic trends made more serious by the concurrent growth of three factors, the internet, the growth of abusive trade policies, and the rise of a global corporate/industrial partnership.

     

    1. The world population of 7.2 billion in mid-2013 is projected to increase by almost one billion people within the next twelve years, according to official United Nations population estimates (medium variant, 2012 Revision). It is projected to reach 8.1 billion in 2025, and to further increase to 9.6 billion in 2050 and 10.9 billion by 2100. Any "market" including labor, across the entire spectrum of jobs, comes under pressure when there is an oversupply. Too many folks for each job opportunity means lower wages period.
    2. The rise of the internet and communications in general facilitate the movement of capital and labor costs to the most favorable location for low cost labor with minimal working and environmental standards as never before in history.
    3. Central banks and the military industrial complex of each nation have worked together to mask the protection of profits controlled by the few under the guise of "sacred" "Free Trade Agreements" which are neither free for the middle classes of the world or constructive for the development of the exploited low wage countries, but merely protect what is the largest shift of wealth to the 1% in the history of the world. The USA created more millionaires last year than ever while labor participation dropped to 1978 levels as one example. Cocoa is precessed by child labor in Africa as shown on CNN recently and several suicides this year in China making IPhones under abusive labor conditions. Meanwhile China sends huge amounts of air pollution to California not to mention the radiation coming our way from Japan with no talk of reparations.
    Conclusion: If you want to return to a "Feudal" society with royalty and serfs you should be happy about the current policies of "developed" nations. If you want however a productive free and fair capitalistic system that encourages social mobility and steady growth then you need to demand that countries and regions develop their economies with an eye on the true costs of a decent society and adjust trade and monetary practices to discourage exploitation of the poor around the world and the aggregation of wealth and power in so few hands. Not to do this is to invite the rise of something worse, extreme Socialism/Communism, and we saw in the last century what a failure that was.
    17 Feb 2014, 11:27 AM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    SO more social engineering is your solution?
    17 Feb 2014, 12:34 PM Reply Like
  • Guardian3981
    , contributor
    Comments (2459) | Send Message
     
    The biggest problem I see is the government has made it hard for small business to thrive.

     

    Politics have been all about helping the poor and corporations. If your middle class or small business your screwed, hence why each are shrinking.
    17 Feb 2014, 11:28 AM Reply Like
  • Bret Jensen
    , contributor
    Comments (13647) | Send Message
     
    One need only to look at the impacts of Obamacare to see the truth in your statement.
    17 Feb 2014, 12:02 PM Reply Like
  • positivethoughts
    , contributor
    Comments (2064) | Send Message
     
    Even liberals know Obamacare is a failure. But most people - even most conservatives - root for their 'team', regardless of the consequences. Voters and politicians mirror teenagers and their social patterns in highschool. Politics, and society in general, is really an extension of what takes place in highschool.

     

    In Canada, people know our healthcare system produces long wait times and suffering, but most people are happy with it because they feel better knowing that everyone is 'in the same boat', meaning everyone is waiting, together. It is the group, or pack mentality at work.

     

    Go to any 'communist' country (I use that term loosely), and you will find a level of happiness amongst the people in that everyone is at the same level, somewhat.

     

    To most people, they dont mind having a worse outcome over a better outcome, as long as that worse outcome is common. What really bothers people is when they suffer and other people dont. As long as people can look around them and see that everyone else is experiencing the same pain, they find comfort.

     

    17 Feb 2014, 12:20 PM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    positvethoughts

     

    And what you describe is the liberal utopia. Equal suffering for all.

     

    Conservatives, on the other side, seek a society where everyone can work hard and rise above the group misery the liberals so love.
    17 Feb 2014, 12:24 PM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    Agreed. The government subsidizes poverty so naturally the number of people in poverty grows. Corporations own the politicians - no need to say more.

     

    America has become a corporatocracy. As a side effect, payments for the serfs must be made to prevent revolution.
    17 Feb 2014, 12:40 PM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    wait just a minute - when you take into account tax deductions along with the other tax expenditures, you can see gov't subsidizes the rich in absolute dollars, so naturally the rich get richer. http://wapo.st/MFp2BR
    17 Feb 2014, 12:52 PM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    justaminute

     

    Look at the current messes in Argentina and Venezuela for a glimpse.
    17 Feb 2014, 12:55 PM Reply Like
  • wyostocks
    , contributor
    Comments (9112) | Send Message
     
    berbno

     

    We have had this debate before. Tax deductions ARE NOT subsidies. PERIOD.
    17 Feb 2014, 12:56 PM Reply Like
  • optionsexpert
    , contributor
    Comments (482) | Send Message
     
    Absolute drivel.
    17 Feb 2014, 01:01 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Accounting 101.

     

    Know the difference between tax deductions and Tax credits.

     

    Hint;

     

    They are not the same. And the former in no way represents a "subsidy"

     

    Period.
    17 Feb 2014, 01:03 PM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    wyo/1980 - call it what you want. You guys love all the tax expenditures thru the tax code, because it's "invisible" and it's not scrutinized every year. You get your money from the gov't to do this or to do that, and you're somehow better than those getting foodstamps...let's call it like it is...gov't handouts.

     

    "Let’s replace all tax expenditures with explicit subsidies — that is, with actual federal payments — so we can really see the costs and debate all spending programs on an equal footing. Doing so would help us answer crucial questions, such as whether we get more bang for our buck by subsidizing homeownership or buying certain kinds of cars or compensating investment losses or....

     

    Would you support giving millionaires with mansions 25 times more than the typical family? That’s effectively what we do: Middle-class families get an average benefit from the mortgage interest deduction of $139, while families in the top 1 percent get $3,752...."The Tax Policy Center
    17 Feb 2014, 05:57 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    berbno1

     

    "You get your money from the gov't"

     

    Accounting 101

     

    Re-read 1:03 PM post.

     

    Nobody "gets" anything from tax deductions.

     

    Tax Credits are another matter.

     

    As far as tax deductions, the largest revenue forfeiture from from deductions, actually comes from Cadillac medical benefits largely enjoyed by union and government employee benefit plans.

     

    As far as mortgages:

     

    By the time most middle class mortgage deductions are taken, that puts many of them in the 0-10% tax bracket. Hence the fact that 47% no longer pay any income taxes at all, while the top 10% pay 90% of it all.
    17 Feb 2014, 06:14 PM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    come on, now you call it "revenue forfeiture"...walks like a subsidy, qwacks like a subsidy, just call it a subsidy, and congress can vote up or down...we call it transparency. OK, using your medical benefits example...is that equitable?

     

    In stark contrast to, say, social programs, tax breaks vastly favor the rich over the middle class and the poor. Most people never get the opportunity to benefit from the top tax breaks...or "revenue forfeitures" as you call them.

     

    "When it comes to tax deductions {revenue forfeitures}, it is good to be rich -- the richer, the better." -Bankrate.com

     

    http://bit.ly/1bfHufF
    http://huff.to/1bfHrk2

     

    Effective tax rates: pretty much the same (25-30%) for middle 20% all the way to top 1%
    http://wapo.st/1bfHufI
    17 Feb 2014, 06:46 PM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    There is no such thing as "tax expenditures." Taxes are levied, but do not generate income until paid. If you choose to alter the tax code to reduce the income from them, that is not an expenditure. You can't "expend" something until you have it. Tax expenditures is a term created by pointy-headed intellectuals to cover for another reason to raise taxes.
    17 Feb 2014, 07:04 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    berbno1,
    You can post anything you want.

     

    The fact is the rich pay a higher percentage of the total bill than ever before, while the masses pay less than ever before.

     

    meanwhile more "poor people" than ever before, are fat, have cable TV , Air conditioning, internet, I-phones, medical care , than ever before.
    17 Feb 2014, 07:19 PM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    justa - exactly the point. That's why tax deductions are so well liked by the wealthy. If we had a simple tax code, collect the tax, then make subsidy payments for having a mortgage, retirement investment, investment loss, it would be an expenditure, ...a handout, if you will. Then we would routinely decide if we want it to continue the "handout" in the effort to reduce the federal deficit.

     

    subsidy vs expediture vs revenue forfeiture?...net result is the same. And it's not just the pointy-headed guys advocating this tax reform.
    17 Feb 2014, 07:20 PM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    We should have a simple tax code. Everyone pays something. Simple, enforceable and "fair." Everyone should have some skin in the game.
    17 Feb 2014, 07:23 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Every dollar not confiscated from you, is hereby defined as a "subsidy"

     

    But perhaps you are one on the "net receiving" end?
    17 Feb 2014, 07:24 PM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    1980 - re: "net receiving" end. The truth is, as a retiree, with mortgage, retirement contributions, charitable contributions, medical expenses, on and on, TurboTax came up with an embarrassingly low effective tax rate. But I suggest the chart below indicates that a lot more are in that situation than are willing to admit. That's why you resist the tax expenditure terminology.

     

    http://wapo.st/MFp2BR
    17 Feb 2014, 07:52 PM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    Too bad they do not define what the tax expenditures are on your pretty little picture. And too bad it leaves out direct welfare payments and other subsidies outside tax policy.
    17 Feb 2014, 07:55 PM Reply Like
  • berbno1
    , contributor
    Comments (1520) | Send Message
     
    just - OK, but promise you'll really read it. And, assume you now believe CBO is a reliable source, and you're really serious about reducing federal debt..

     

    http://bit.ly/1bfVuGt

     

    What does your pretty picture look like?
    17 Feb 2014, 08:18 PM Reply Like
  • dancing diva
    , contributor
    Comments (2718) | Send Message
     
    Everyone isn't in the same boat. The rich have the ability to go to anywhere they want for their health care.
    17 Feb 2014, 08:38 PM Reply Like
  • getreal10000
    , contributor
    Comments (250) | Send Message
     
    Try as they might, government will never find a way to redistribute brains, motivation, common sense, hard work or discipline. And the inequality gap is only going to grow as government keeps incentivizing people to not work.

     

    It's amusing the way Larry Summers and progressives in general talk about income "going to" top earners, as if it just flowed that way magically by some unidentified force. Beliefs like that imply passivity, as if there is nothing a person can do to improve his/her own circumstances. Of course this is the polar opposite of what most successful people have done in their own lives, LS included. They didn't sit around waiting for someone else to make it happen.
    17 Feb 2014, 11:50 AM Reply Like
  • optionsexpert
    , contributor
    Comments (482) | Send Message
     
    Unless you're a trust fund baby.
    17 Feb 2014, 11:56 AM Reply Like
  • justaminute
    , contributor
    Comments (1510) | Send Message
     
    Well said, getreal.
    17 Feb 2014, 12:41 PM Reply Like
  • mitrado
    , contributor
    Comments (2033) | Send Message
     
    What "Middle Class"? It's called The Precariat nowadays.
    17 Feb 2014, 11:52 AM Reply Like
  • Bear Bait
    , contributor
    Comments (911) | Send Message
     
    The higher incomes should pay more. I would just love to be in the max tax bracket! Even at 50%. The way I see it; it just like seats at the ball game. Good seats cost more. If you are seating in the good seats in the US economy, it's going to cost you more. But, you say it penalizes hard work. Well just how freaking hard did the heirs to the Walmart fortune have to work?
    17 Feb 2014, 11:55 AM Reply Like
  • grharmon
    , contributor
    Comments (69) | Send Message
     
    Facts are facts, the mortgage interest tax credit greatly benefits the top 20% over the bottom 20%,10 to 1.
    17 Feb 2014, 12:21 PM Reply Like
  • kmi
    , contributor
    Comments (4558) | Send Message
     
    The key is that the middle class should pay less.

     

    Government provided 'benefits' should not provide a 'middle class' equivalent lifestyle: they should promote upward mobility into self-sufficiency and into the middle class.

     

    And at the same time, exorbitantly large incomes that don't feed back into the economy should be taxed far more.

     

    Right now the entire economy is supported on the back of the middle class, both the entitlements for the poor as well as the tax shelters for the rich. The tax code effectively penalizes you for being middle class.
    17 Feb 2014, 12:26 PM Reply Like
  • Jake2992
    , contributor
    Comments (1084) | Send Message
     
    The wealthy didn't have to sacrifice a single thing after they created the massive financial crisis that ruined a generation of American wealth. Now, they have the audacity to demand we, the middle class, carry the burden of the poor.
    17 Feb 2014, 06:46 PM Reply Like
  • Tack
    , contributor
    Comments (16173) | Send Message
     
    In 1984, only 15% of the population paid no income taxes; now, the percentage is 47%. Vote-pandering politicians have turned motivation-sapping entitlements into a growth industry.
    17 Feb 2014, 01:00 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Tack,

     

    Silly me. And I actually thought the Rich people were keeping the little man down :)
    17 Feb 2014, 01:13 PM Reply Like
  • Tack
    , contributor
    Comments (16173) | Send Message
     
    And, the ultimate irony is that when they have converted the vast majority of the populace to meager entitlement servitude, and the all-powerful politician class is the only remaining royalty, then, we'll have the genuine embodiment of the privileged class that they disingenuously deride to the gullible masses.
    17 Feb 2014, 01:34 PM Reply Like
  • Bret Jensen
    , contributor
    Comments (13647) | Send Message
     
    Please don't disclose the business model of the left. Another example is Britain. When Labor came to power in 1997, there were 600K on the disability roles....when they were voted out in 2009, 2.6mm were on the disability roles......contributed mightily to the reduced unemployment rates during that period. Sounds familiar with our falling labor participation rates, no?
    17 Feb 2014, 01:54 PM Reply Like
  • kmi
    , contributor
    Comments (4558) | Send Message
     
    Real wealth is highly diversified and nation-state independent.

     

    Seriously, fear-mongering in the name of the wealthy is pretty pathetic. When money can be made more easily, securely, or effectively anywhere else, the wealthy will move their assets and themselves there. It is a meaningless argument.

     

    The middle class, on the other hand, is the fundamental backbone of any nation state, both its consumption class as well as its productive class. It contributes a higher percentage of its non-disposable income towards taxes and the general welfare than either the 'wealthy' or the 'entitled' and tends to locate the entirety of its assets inside the nation-state of its residence. Spreading FUD is characteristic of a weak arguement.

     

    Woe be to us, the wealthy, for we bear the burden of supporting the nation, with our wealth. Woe be to us, with all our cars, our six-packs of rolexes and our underwater airplanes.

     

    Yeah, right.
    17 Feb 2014, 03:33 PM Reply Like
  • Armengaro
    , contributor
    Comment (1) | Send Message
     
    Great civilizations began with opportunity and expectations. Then fizzled away when these catalysts were neutralized with other forces. Our forefathers established a Democratic Capitalism where opportunity and expectations were the magnet for our liberty and pursuit of our happiness. Overtime, with the help of congress, it changed into Authoritarian Capitalism. Let's hope there is still time not to follow the footsteps of Roman Empire and Bolshevism where absolute power created absolute corruption and it's citizens paused to ask: Why bother to work.
    17 Feb 2014, 05:51 PM Reply Like
  • Jake2992
    , contributor
    Comments (1084) | Send Message
     
    With wages stagnant and Republicans blocking any increase, it makes you wonder how high poverty will climb in this country.
    17 Feb 2014, 06:43 PM Reply Like
  • wizjinx
    , contributor
    Comments (476) | Send Message
     
    What we need to eliminate are the loopholes and shelters the rich use to hide their money. Mitt Romney paid a 13.9% tax rate in 2012. I make about 90k a year, and I paid about 28% in income taxes. That is a shameful disparity.
    17 Feb 2014, 08:04 PM Reply Like
  • taxman100
    , contributor
    Comments (551) | Send Message
     
    You need to max out your 401(k), pretax health premiums, set up an HSA and max fund it, pretax on your commuting expenses, etc. That should knock close to $25,000 off of your taxable income without really trying. Of course, those are not loopholes - only the rich have loopholes.

     

    Oh yeah, have a couple of children if you want to further reduce that tax rate, and hopefully you will have a basement to live in old age when this house of cards finally falls.

     

    Also consider moving out of a high tax state. Not that I've taken that advice when I pay the ridiculous local income taxes in Ohio, but once retirement happens we are out of here.
    17 Feb 2014, 11:52 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    So you paid about $20K in taxes, while Mitt paid prolly paid millions?

     

    That sounds fair to me.

     

    He prolly used at least 100X more in Gov't services vs yourself, based on the
    "Fair Share" metric.

     

    You obviously won.

     

    Be happy.
    17 Feb 2014, 08:12 PM Reply Like
  • Harry Piels
    , contributor
    Comments (161) | Send Message
     
    How can Washington Pols pretend to be for the middle class when they are about to provide citizenship (and welfare) for millions of illegals who will be competing for jobs with the unemployed? The current quota for legal immigrants is also way too high for a fragile economy. These policies will aggravate America's debt and will keep wages low and jobs scarce, and certainly endanger our currency and credit rating. DUH !.
    17 Feb 2014, 08:33 PM Reply Like
  • taxman100
    , contributor
    Comments (551) | Send Message
     
    Washington Pols are not for U.S. citizens. They are for themselves and the ruling class. Their loyalty to the United States is only when they desire to send the youth of this country off to die in a war.
    17 Feb 2014, 11:55 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs