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Mary Meeker, former "Queen of the Net" turned venture capitalist, urges taxpayers to think of...

Mary Meeker, former "Queen of the Net" turned venture capitalist, urges taxpayers to think of themselves as shareholders in USA Inc. - a debt-laden, bloated corporation. Medicare and Medicaid are the real “crushers” to solvency, she says, and their reform should be top priority. "We have big issues, but the U.S. is in sounder shape than Apple (AAPL) was in 1997."
Comments (13)
  • Basant
    , contributor
    Comment (1) | Send Message
     
    So here is my view:
    1. Politicians like to say about thinks whivh will scare people and ask for their help

     

    2. There is a separate tax to support Medicare which should be going to medicare fund. This is not a general expense, should not talked in reference to overall tax proposals.

     

    3. Same thing for Social security, separate tax, separate fund and should be managed completely outside of overall budget.

     

    To me it would make more sense if we have a non-partisan group of people (citizens and experts) who are manging these funds, we will have less talk and less problems and less of fear mongering. And please do not call these two as taxes, I am creating a fund to support me in my old age....

     

    What you think?
    24 Feb 2011, 02:37 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3530) | Send Message
     
    "To me it would make more sense if we have a non-partisan group of people (citizens and experts) who are managing these funds, we will have less talk and less problems and less of fear mongering. And please do not call these two as taxes,"

     

    Since these programs were originally intended to be social INSURANCE programs, a non-government panel running it would like an insurance company with actuarial computations, would make a lot of sense. Problem is, they spent all of the reserves.
    24 Feb 2011, 04:09 PM Reply Like
  • wyostocks
    , contributor
    Comments (7872) | Send Message
     
    Apple had, and has, something the American Government is sorely lacking, good management willing to solve the problems.
    24 Feb 2011, 02:42 PM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    "...taxpayers to think of themselves as shareholders in USA Inc. - a debt-laden, bloated corporation."

     

    Carl Icahn just revealed his 5% stake and is looking to replace the board.
    24 Feb 2011, 02:46 PM Reply Like
  • Matthew Green
    , contributor
    Comments (457) | Send Message
     
    They'll just dilute his stake by debasing the dollar until all the problems are impeding the day-to-day functions of the corporation and shareholders revolt, in this case march on Washington.
    24 Feb 2011, 02:59 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2888) | Send Message
     
    Tea Party gets most of its votes from the 60+ crowd. Until they are willing to take sacrifices in medicare and social security, we can forget about cutting deficits and reducing federal debt.
    24 Feb 2011, 02:46 PM Reply Like
  • headlocal
    , contributor
    Comments (104) | Send Message
     
    Naive idea - the top 10% of taxpayers pay 70% of income taxes, the bottom 50% <3%, the 50-90% group is loaded with the public employees who stand most to gain from the status quo.

     

    By my count, that means 70-90% of votes think all issues can be solved by sending someone else the bill. As Joe Biden put it "suck it up, higher taxes are coming", during the '08 campaign.

     

    Name one corporation whose capital contributors have a similar "voting rights" profile as the minority who actually pay taxes!

     

    Until a Shapley-value structure of voting arises, this won't change; probably a collapse of the current republic and a new constitution will be needed. As the Romans showed, nothing lasts forever.

     

    Oh, BTW, AAPL had founder Steve Jobs come back into power. George Washington is not available.
    24 Feb 2011, 04:16 PM Reply Like
  • kmi
    , contributor
    Comments (4024) | Send Message
     
    Seriously? You are building an argument supported by the fiasco of what the US tax system has become?

     

    Funny.
    24 Feb 2011, 05:15 PM Reply Like
  • headlocal
    , contributor
    Comments (104) | Send Message
     
    KMI -

     

    you may remember back in 1980, after CA's prop 13 revolt, there was a lot of talk about calling for a constitutional convention, which scared/stimulated an entire generation of politicians into rediscovering their role as stewards of the republic.

     

    When you read Mary Meeker's article cited above, note the line "By our rough estimate, USA Inc. has a net worth of negative $44 trillion. That comes to $143,000 per capita. Negative."

     

    Based on POTUS rhetoric, guess how our "representatives" will allocate covering the per-capita $143K. As an RE investor, I'd put you down for roughly $10M (assuming you are in the top 1% and die as a U.S.national). Joe Biden puts it best - SUCK IT UP!

     

    And I'm not building any arguments about any political stuff; it's such a lagging indicator. To paraphrase Jimi Hendrix - POLITICS IS SUCH A DRAG (Burning of the Midnight Lamp).
    24 Feb 2011, 06:00 PM Reply Like
  • kmi
    , contributor
    Comments (4024) | Send Message
     
    That's fair;

     

    My suggestion is mostly that whenever someone starts talking about tax and income distribution it inevitably leads to "my fair share rhetoric."

     

    I'll suggest several things -

     

    If your comment about the 70-90% being able to send someone else the bill, actually DID - i.e. VOTED to, the side combating this wouldn't have a prayer to stop it. However, history shows that this is not the case.

     

    The let's say 70% who can theoretically vote to send the bill to the upper class don't. The reason is complicated, but it is in part because of ideology, in part because of stupidity, in part because of lack of education and resources, in part because they don't vote, and in large part because the top 10% of earners in the country wield power completely out of whack with the 1 person 1 vote ideal of the founding fathers.

     

    The worst part about an arguement based around taxation, is that the MIDDLE CLASS pays a disproprotionate percentage of INCOME under the tax code; the top percentages may pay more in a dollars and cents sense, byt the actual take home of the middle class is lower.

     

    So you can consider income and tax revenue in an arguement but once you strip away the BS it hardly stands as a way to objectively look at the US.

     

    The biggest fiasco is that any increase in the national tax burden routinely disproportinately falls upon the backs of the middle class, since low income earners pay nothing and the wealthy pay lower effective tax rates. Couple that with an effective wealth trasfer over the last decade and inparticular as a result of the recent financial crisis from the middle to the kleptocrats and the picture is worse.

     

    My comment was mostly in consideration of all that, and more. It doesn't come out to $143,000/capita, but is a bell curve rising from nothing at the lowest end of the tax and income, to the heaviest burden falling squarely on the middle, and decreasing back to virtually meaningless numbers for the wealthy.

     

    And you're right - I'm one of the guys who get hit with high rates - since my income is income, not capital gains or dividends - and I'm located in an area which has had the highest tax rates in the nation for a long time (Westchester NY).

     

    And you know what? The lower income brackets have been too stupid to vote to their benefit, too uneducated, too ideological, too poor to take the time, or too brainwashed.

     

    But enough is enough, we finally got the right people in power. Republican Rob Astorino our county executive is kicking ass, having proposed a 1% decrease on taxes with a balanced budget free of gimmickry (not sure what came of it); Democrat Cuomo is proposing property tax caps and is aggressively hammering his proposals in Albany right now.

     

    If we could somehow gets guys like these in the freaking FEDERAL governemnt instead of the clowns there now the country would be in much better shape.

     

    Didn't intend to go off at this length, that's why I made a two sentence comment above, but you seemed you might be interested in what I had to say.
    25 Feb 2011, 08:15 AM Reply Like
  • headlocal
    , contributor
    Comments (104) | Send Message
     
    KMI -

     

    I said 70-90% THINK the bill will go to someone else, and they do vote roughly along those lines (I live in CA where all my adult life I've seen proposition after proposition passed without any attempt ever to tally the cumulative impact of the costs).

     

    But, as www.opensecrets.org/ makes clear, our elected representatives are bought and paid for via campaign contributions. Amusingly enough, News Corp, parent of Fox News, gave $10K to Nancy Pelosi...which would seem philosophically dissonant until you realize that they are purchasing access, in the exact sense of a Shapley-value coalition cf en.wikipedia.org/wiki/...

     

    The din and clatter of politics is, like Macbeth's soliloquoy:
    ...a tale
    Told by an idiot, full of sound and fury,
    Signifying nothing.

     

    BTW, consider re-domiciling to the Nevada side of Lake Tahoe...no income taxes, and you can still maintain your Westchester pad as a vacation villa on just your tax savings, if you choose. Reasonable rents cf
    reno.craigslist.org/apa/ try Upper Kingsbury, near Stateline, or Zephyr Cove.

     

    Sorry if I set you off - my wife and kids allege that I become outspoken, too. Then I remember Matt 7:6, "pearls before swine", and go back to looking for volatility trades that actually pay off.

     

    BTW #2 - Mary Meeker's 460-slide report (~4.5M in pdf format) looks like an interesting read. I just downloaded it for some light reading...seems like an interesting compilation of macro-financial facts, although it will undoubtedly leave me loaded with facts that few others even care enough to learn, so intelligent discussion is mostly a forlorn fantasy.
    1 Mar 2011, 05:40 AM Reply Like
  • kmi
    , contributor
    Comments (4024) | Send Message
     
    Ah yes... intelligent discussion... such a rare thing hah.

     

    Your comments are well received and you didn't really set me off, I merely thought there was interest in my view, so I wrote at length.

     

    And I do indeed agree with you to an extent I only disagree in that here in NY I am seeing change that doesn't quite match your own experience of the population voting along income lines as much as ideological ones.
    1 Mar 2011, 06:49 AM Reply Like
  • headlocal
    , contributor
    Comments (104) | Send Message
     
    KMI -

     

    it's not actual "...experience of the population voting along income lines..." that I have; just a rational-expectations observation that with <3% of income taxes paid by the sub-median return sector, and most public employees (20M state & local, maybe another 10M federal civilian) above a 33K median income, on a base of ~140M returns, this represents an overwhelming majority of the electorate either indifferent to the impact of spending costs or having an income-based personal interest in continued spending.

     

    All my numbers come from the Tax Foundation's ff249, at
    www.taxfoundation.org/...

     

    The real challenge is that, if we allocate the resulting negative "ownership" of the $44T negative national equity (sheet 9 of Mary Meeker's slide show, www.kpcb.com/usainc/US...) in the same proportions as the 2008 federal income tax burdens, the top 1% "get" 38% of the load, or ~$16.4T distributed over 1.39M contributors. That load is ~$12M per return, or about 10 years of current average income, over and above the usual state and federal tax loads.

     

    Even if the government waits to collect it as an estate tax, at the proposed 45% rate, estates have to be above about $30M to collect the $12M that way, and I'd be surprised if the average top-1% taxpayer had that much equity capital in play, just to average ~$1M income.

     

    So, while you observe "...that the MIDDLE CLASS pays a disproportionate percentage of INCOME under the tax code..." I focus on the macro facts that the top 10% pay ~70% of the total $s, and it is the surplus retained by this group that creates the preponderance of capital going into risk-laden new ventures (and job creation), as opposed to 401Ks, IRAs, and other institutional pension structures. Thus, any serious raids on their retained surplus will predictably have out-year consequences to voters, whether their voting is informed by income, entitlement mentality, or ideology. A wee bit like choosing whether to "disembark" from the Titanic on the port or starboard side.

     

    Adds up to my usual economic forecast: gusting volatility, blustery at times, indefinitely into the future.
    2 Mar 2011, 06:11 AM Reply Like
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