Drudge Retort: The Other Side of the News
Saturday, November 09, 2019

IN A RECENT DEBATE at the Peterson Institute for International Economics about whether a wealth tax would help lower inequality, Larry Summers, a very wealthy man, rose to express a dissenting opinion.

He's far from the only one whining. All sorts of wealthy people don't like the wealth tax.

Billionaire Leon Cooperman threw a temper tantrum in an open letter to Elizabeth Warren, telling her that her "vilification of the rich is misguided," before getting choked up about the tax on CNBC.

Bill Gates chimed in at a the New York Times DealBook conference to say that he has "paid more than anyone in taxes," which is probably true, but deliberately elides the fact that the United States has very low rates.

Not to be outdone, Michael Bloomberg is preparing to renege on his vow to stay out of the presidential race, perhaps because his abstention was contingent on the likelihood that Joe Biden would become the nominee and leave his vast fortune untouched.

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From the link ...

The first speaker had been Emmanuel Saez, an economist and advisor to Elizabeth Warren. Saez, along with Gabriel Zucman, helped to design Warren's proposed wealth tax: a 2 percent tax on every dollar of wealth over $50 million, and a 3 to 6 percent tax on wealth over ten figures.

While Saez had given a prepared PowerPoint presentation, Summers, with a jowly old man's confidence, appeared to speak off the cuff.

First, he wanted everyone to know that he is, politically, on the right side of history.

"Let me say I speak from the perspective of someone who thinks the United States should be a vastly more just society, with a government that does substantially more to help the middle class and, uh, the poor," he said.

Sure, he was about to argue for twenty minutes against progressive taxation, but he wanted the audience to know that his heart is in the right place.

Near the end of his speech at the Peterson Institute last month, Summers growled on about some evidence that when workers take ownership of a company, the profits are spent on not on expanding the business, but on the workers themselves.

It is almost impossible to imagine how this could be a bad thing.

And in a fitting, populist response to his display, Summers's moronic Ford tweet was almost immediately ratioed, sitting now at nearly 3,000 replies to a mere fifty-six retweets.


Larry Summers = Douchebag

#1 | Posted by PinchALoaf at 2019-11-09 11:04 AM | Reply

Steve Schwarzman On Tax Increases: "It's Like When Hitler Invaded Poland"
www.businessinsider.com

Pity the billionaires!

#2 | Posted by PinchALoaf at 2019-11-09 11:40 AM | Reply

Oh please PinchALoaf

I fight for the Billionaris because the Millionaires are next, and after that the day worker.

You know the first taxes were sold on the idea that they would only be imposed on the rich .... right?

Well now everyone has to pay their pound of flesh.

The Government is spending TOOOOO MUCH, right now its not a revenue issue.

#3 | Posted by AndreaMackris at 2019-11-09 05:54 PM | Reply

I fight for the Billionaris because the Millionaires are next, and after that the day worker.

You know the first taxes were sold on the idea that they would only be imposed on the rich .... right?

Well now everyone has to pay their pound of flesh.

The Government is spending TOOOOO MUCH, right now its not a revenue issue.

#3 | POSTED BY ANDREAMACKRIS

You fight for billionaires? That's a fight you're going to lose.

Strong bipartisan majorities of Americans support higher taxes on the rich.

And government spends SOOOOO MUCH that last September the Federal Reserve pumped $128 billion into the economy to prop up banks teetering on the brink -- and no one was demanding where the money was coming from and how America would pay for it.

By the way, $128 billion would pay for free college and ratchet down future healthcare costs due to a larger educated percentage of the American population.

#4 | Posted by PinchALoaf at 2019-11-09 06:42 PM | Reply

"The Government is spending TOOOOO MUCH"

Taxes should be raised to match expenditures.

#5 | Posted by Danforth at 2019-11-09 07:24 PM | Reply

The DEA should be eliminated. The DoD should be slashed by 80%. ICE should be funded from fines on illegal employers and send undocumented tourists home.

The IRS should be doubled and expand bounties for info that leads to conviction of tax criminals.

Raise taxes and invest in infrastructure and green energy research and incentives.

That will create millions of jobs for veterans and modernize the US economy.

#6 | Posted by bored at 2019-11-09 08:04 PM | Reply

"I fight for the Billionaris because the Millionaires are next, and after that the day worker."

The day worker is already paying his/her fair share but the rich aren't.

#7 | Posted by danni at 2019-11-11 08:38 AM | Reply | Newsworthy 1

"You fight for billionaires? That's a fight you're going to lose. Strong bipartisan majorities of Americans support higher taxes on the rich."

Maybe.

I'll let Danforth chime in if he has anything, but I don't think that a 2% tax on every dollar earned above $10m is going to have a drastically different outcome than a 2% increase on taxes at any level. But the thing you need to remember is that, before you can tax income, it must be earned. And if there is some other value-added activity that I could engage in that would allow an earner to not pay taxes, that's what they will likely do.

"Taxes should be raised to match expenditures."

The US needs a VAT.

#8 | Posted by madbomber at 2019-11-11 03:17 PM | Reply

"I'll let Danforth chime in if he has anything, but I don't think that a 2% tax on every dollar earned above $10m is going to have a drastically different outcome than a 2% increase on taxes at any level."

"before you can tax income, it must be earned"

Not true at all. Unearned income like interest or dividends are taxed. So is other unearned income, like a lottery win. Even finding a diamond ring and selling it means the income, while not earned, is still taxable, and at ordinary rates.

Also...Warren is suggesting a wealth accumulation tax. That would include inheritances, GRATs, stepped-up basis, etc...all "unearned".

#9 | Posted by Danforth at 2019-11-11 03:23 PM | Reply

-Warren is suggesting a wealth accumulation tax

good luck with that idea....

#10 | Posted by eberly at 2019-11-11 03:25 PM | Reply

"I don't think that a 2% tax on every dollar earned above $10m is going to have a drastically different outcome than a 2% increase on taxes at any level."

You'd have to see the numerical parameters in each bracket to make any kind of educated guess.

Regardless, a 2% tax anywhere else is going to tax those folks the hardest, and not the wealthiest. As it is, the worker who pays the highest percentage of income in federal taxes isn't the millionaire, or even the billionaire. It's the W-2 worker making $130K a year.

#11 | Posted by Danforth at 2019-11-11 03:26 PM | Reply

"good luck with that idea...."

She's got worse. Although it's not a terribly bad idea, especially to combat a tax code that is written to funnel money upward. But M4A is a terrible place to start, and if you're also set to outlaw private insurance, you've lost before you've gotten out of the gate.

A public option should be next. If that can be passed, the sheer economics will force single payer in time.

#12 | Posted by Danforth at 2019-11-11 03:30 PM | Reply

Wouldn't property tax be considered an existing form of wealth taxation?

You own land, but have to chip some off to the local government every year.

#13 | Posted by schifferbrains at 2019-11-11 03:33 PM | Reply

"Not true at all. Unearned income like interest or dividends are taxed."

In accounting, is it normal use the term unearned income when referring to interest? It's been a while since I took an accounting class, but I thought all income was considered "earned." I don't remember ever addressing lottery winnings, gifts, or inheritance when it came to taxes.

In any case, they are earnings resulting from economic activity, which means that the resources used to generate those revenues could be used to do something else, if something else were of greater benefit to the person engaging in that activity. Such as cashing in stocks to buy something.

#14 | Posted by madbomber at 2019-11-11 04:19 PM | Reply

"Regardless, a 2% tax anywhere else is going to tax those folks the hardest, and not the wealthiest. As it is, the worker who pays the highest percentage of income in federal taxes isn't the millionaire, or even the billionaire. It's the W-2 worker making $130K a year."

And I could be very wrong, but I don't think that a 2% tax change is going to have a large enough effect that it would impact their income generating activity.

#15 | Posted by madbomber at 2019-11-11 04:22 PM | Reply

"A public option should be next. If that can be passed, the sheer economics will force single payer in time."

There are 44 countries in Europe, most of which have some sort of government sponsored healthcare plans. Bernie, and to a lesser degree Warren, choose to ignore those because those countries leverage far more taxes on all members of society. Bernie and Warren want to be able to offer similar plans, but restrict those who pay to a relative few.

#16 | Posted by madbomber at 2019-11-11 04:24 PM | Reply

"You own land, but have to chip some off to the local government every year."

You never own the land.

You many own the house, but you occupy the land at the pleasure of government. They'll let you stay on it, and usually even sell it, provided you give them their cut.

#17 | Posted by madbomber at 2019-11-11 04:26 PM | Reply

"In accounting, is it normal use the term unearned income when referring to interest?"

In tax world, it certainly is.

"Earned" would be traded for labor. Unearned would be income derived from assets.

"I don't remember ever addressing lottery winnings, gifts, or inheritance when it came to taxes. "

All are income, the latter two have exceptions: $14K for the first, $11M for the last. GRATs have no limit.

"In any case, they are earnings resulting from economic activity"

But not necessarily work. Hence the difference between earned and unearned.

"the resources used to generate those revenues could be used to do something else, if something else were of greater benefit to the person engaging in that activity."

True, but that doesn't change the fact $50,000 of dividends from McDonalds triggers NO federal taxes, while $50,000 of earned profits triggers over $10K of federal taxes.

#18 | Posted by Danforth at 2019-11-11 04:27 PM | Reply | Newsworthy 1

"I could be very wrong, but I don't think that a 2% tax change is going to have a large enough effect that it would impact their income generating activity."

We've yet to see a rate increase trigger a massive turn away from gainful employment.

In addition, raising the business rates will incentivize reinvestment. Instead, the recent tax code turned the dial to make reinvestment, whether in materials, training, or hiring, less attractive than before, and cashing out profits more attractive than ever.

#19 | Posted by Danforth at 2019-11-11 04:33 PM | Reply

"Bernie, and to a lesser degree Warren, choose to ignore those because those countries leverage far more taxes on all members of society. "

Not just for heath care. Taxes are substantially higher for a broad range of societal reasons. And the fact others pay a lower percentage of their overall GDP to a) cover more people, and b) deliver better measurable results, should tell us there's a better way.

#20 | Posted by Danforth at 2019-11-11 04:36 PM | Reply | Newsworthy 1

"heath care."

Yes, they take great pains to preserve their chocolate-covered toffee.

#21 | Posted by Danforth at 2019-11-11 04:39 PM | Reply

"Not just for heath care. Taxes are substantially higher for a broad range of societal reasons."

My experiences are limited to Germany, but I do work with several people who are Americans, but chose to live in Germany as Germans. Demographically, they are college educated workers who earn an above average income. In general, they prefer the German healthcare system, but with a caveat. You must purchase supplemental insurance. Otherwise, the service isn't very good. But to be honest, I've never met someone outside the US would would prefer a US style system. They exist, obviously, because I've also met a few who still go to the US to get care, but it's not normal. Even with my rabidly conservative friends from across the world.

College is different. A few candidates have promoted free college, but I don't think they fully understand how it works here. In Germany, you begin getting channeled in 4th grade, either along a college track or trades track. In order to attend college, you must attend the Gymnasium or Realschule (preferably Gymnasium). The German government determines what you will study, and it's not terribly easy to change that. And only 28% of Germans are permitted to attend college.

It's not a good thing or a bad thing...it's just different. If you're goal is to become an engineer and you have the talent to do it, Germany is far better. If you're a 30 year old who wants to major in interpretive dance, you'll probably need to go somewhere else to make that a reality.

#22 | Posted by madbomber at 2019-11-11 04:50 PM | Reply | Newsworthy 1

"If you're a 30 year old who wants to major in interpretive dance, you'll probably need to go somewhere else to make that a reality."

Yeah, when "Germany" comes up, the Arts aren't the first thing that comes to mind.

That said, the US has about 33%-34% college graduates, but that's graduates, so I'm not sure how that compares with 28% attending (though I'd bet Germany has a higher graduates-to-attendees ratio). Also, while a ceiling on college students might be good, it flies in the face of the American Success Story, so I doubt limits would ever pass here.

On a personal note, under Germany's rules, no one would've loaned me money for my college in Acting School. But I went on to do over 2,000 jobs in the field, and have earned pensions from the stage actor's Union (Equity), and the TV-Radio Union (AFTRA). Even though I CLEPped out of a lot of math, I didn't want anyone else making my decisions for me. Still don't.

#23 | Posted by Danforth at 2019-11-11 05:05 PM | Reply

"Yeah, when "Germany" comes up, the Arts aren't the first thing that comes to mind."

When I was told that, the first thing that came to mind was the Ballet school in Berlin in Dario Argento's "Susperia." Not sure if you're into horror or not.

"Also, while a ceiling on college students might be good, it flies in the face of the American Success Story, so I doubt limits would ever pass here."

Not just that, but if someone wants to go to college for non-financial reasons, you can't do it. Like a retiree who is simply bored and wanting to learn.

"On a personal note, under Germany's rules, no one would've loaned me money for my college in Acting School"

No kidding? Anything the rest of us might know?

Acting actually seems like I good time waster for retirees. I'm still trying to figure out what I'm going to do with my life when I grow up.

#24 | Posted by madbomber at 2019-11-11 05:19 PM | Reply

The bottom line: From my vantage point, I don't think the people in the US understand the nuances of the European systems when refernced by a candidate like Bernie. I have absolutely nothing against the way they do it in Germany, but I feel like if Bernie or Liz explained the systems writ-large, they wouldn't be nearly as popular as when they reference them as some sort of successful utopia where the rich pay all the bills and the middle class frolics in a relatively cost-free existence.

#25 | Posted by madbomber at 2019-11-11 05:23 PM | Reply | Newsworthy 1

"Anything the rest of us might know?"

A few, including some award winners; More in radio; you've definitely heard my voice over the years.

"Acting actually seems like I good time waster for retirees."

It's a blast: great milieu, fun folks, and a (seemingly unattainable) group goal. When it worked, it was the greatest job in the world. When it didn't, you look for tall buildings to jump off. Luckily, I've been centered in cities where there was much more work than tall buildings. Also, I'm very aware...I worked in a business where nobody worked, where 80%+ of the folks weren't employed at any given time. I was very lucky, in part because I couldn't see myself doing anything else, so I stuck with it, doggedly. I'm also aware I was the ideal demographic for those times: white male.

I caught a big break one day, when I broke the rules about never making suggestions while doing a radio spot. The studio couldn't find the prior version the clients wanted to copy, and after several failed attempts, the atmosphere was getting very tense. They had made it very clear to me the only reason I was hired was they couldn't get the guy they wanted. The "dad" was at that time the voice of MLB, and he had an 11am tee time he was NOT going to miss. Everyone in the booth was arguing, when I piped up:

"Excuse me, I'm a classically-trained actor; and I follow direction VERY well. How about if we do it, and you give me any direction you want? I'll do it any way you please." They resigned themselves to the fact the old tape was gone, and grudgingly gave the go-ahead for a take.

Now...in the booth, there's a spring-loaded talk button, which automatically cuts out if any recording is happening, to avoid feedback. There's also a toggle switch, if the engineer has to keep talking to you while he's adjusting reels and machines behind him. Well...someone in the booth accidentally leaned on the toggle switch, so when we were done, we could hear EVERY WORD they were saying.

At first, there was a cool moment of dead silence. Then one producer said, "That was perfect." Another said, "He was better than the guy last year." This went on for a while, and then they "pressed the button" and thought we could finally hear them. They said it was okay, and we should do another take.

The praise was just a good after the second take. They finally did one more safety, and dismissed myself and Mr. MLB.

What I didn't know at the time: the engineer was married to my new agent. He went home that night, chuckled as he told the story, and suggested his wife keep sending that new kid out. 6 spots the previous year became 36 spots, then 75, then 150, then 200. I didn't pay a health insurance premium for the next 22 years.

#26 | Posted by Danforth at 2019-11-11 06:39 PM | Reply

"when they reference them as some sort of successful utopia where the rich pay all the bills and the middle class frolics in a relatively cost-free existence."

Agreed, 100%.

When the question is asked, "Will the middle class have to pay more taxes?", the answer should be YES, BUT...

...with an explanation how new amounts of taxes won't be as much as folks are currently paying for taxes AND health insurance. Of course...YMMV.

#27 | Posted by Danforth at 2019-11-11 06:42 PM | Reply

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