Sunday, July 12, 2009

Baby you're a rich man



Oh for God's sake: Amity Shlaes is at it again, pimping out Atlas Shrugged as the owner's manual for Glibertarians trying to find their way through the awful Obama years:
Some assumed the late libertarian philosopher would fall from view when the Berlin Wall fell. Or that at least there would be a sense of mission accomplished. One Rand fan, former Federal Reserve Chairman Alan Greenspan, wrote in his memoir that he regretted Rand hadn't lived until 1989 or 1990. She'd missed the collapse of communism that she had so often predicted.

But "Atlas Shrugged" is becoming a political "Harry Potter" because Rand shone a spotlight on a problem that still exists: Not pre-1989 Soviet communism, but 2009-style state capitalism. Rand depicted government and companies colluding in the name of economic rescue at the expense of the entrepreneur. That entrepreneur is like the titan Atlas who carries the rest of the world on his shoulders – until he doesn't.

Thankfully Libertarians are a distinct minority today, and tend to actually be Right-wingers who carp about big-government unless it's helping line their pockets.

But then Shlaes actually, well, lies by misdirection and illogic:
In 1986, a year when "Atlas Shrugged" sold 60,000 to 80,000 copies, the top 1 percent of earners paid 26 percent of the income tax. By 2000, that 1 percent was paying 37 percent, and "Atlas Shrugged" sales were at 120,000. By 2006, the top 1 percent carried 40 percent of the burden.

Yet President Barack Obama has made it clear he would like to see the rich pay a greater share. Anyone irked at that prospect can find consolation in Rand's fantasy, in which the most valued professionals evaporate from the work place because of such demands.

Going Galt, as it's called today. Yes, such producers of goods and services as hedge fund managers and Wall St. buffoons going Galt will be disastrous . . . for hedge fund managers and Wall St. buffoons.

Here's the real story on taxes and wealth in the USofA. It's a fairly long piece from the Univ. Ca. Santa Cruz (likely a communist front), but it spells out just where our tax burden is. (Hint: it's really not the ├╝ber-wealthy!):
In the United States, wealth is highly concentrated in a relatively few hands. As of 2004, the top 1% of households (the upper class) owned 34.3% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.3%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.2%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2007).

. . . Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions: Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s (Wolff, 2007).

. . . A key factor behind the high concentration of income, and the likely reason that the concentration has been increasing, can be seen by examining the distribution of what is called "capital income": income from capital gains, dividends, interest, and rents. In 2003, just 1% of all households -- those with after-tax incomes averaging $701,500 -- received 57.5% of all capital income, up from 40% in the early 1990s. On the other hand, the bottom 80% received only 12.6% of capital income, down by nearly half since 1983, when the bottom 80% received 23.5%. Figure 5 and Table 7 provide the details.
Figure 5: Share of capital income earned by top 1% and bottom 80%, 1979-2003 (From Shapiro & Friedman, 2006.)

So no need for worrying about the tax burdens on poor Donald Trump or George Soros. They're doing quite well, thank you.

And Shlaes will continue receiving wingnut welfare and deluding the already delusional.

Here's Warren Buffet on the American taxation system: