One-percenter: why I support Occupy

[donhaas 18]

http://boingboing.net/2011/10/26/one-percenter-why-i-support-occupy.html

 

 

 

Gaius, a self-described member of the 1% ("Herman Cain's 9-9-9 plan would save me roughly $400,000 a year in taxes, and President Obama's tax proposals would cost me more than $100,000") writes on DailyKos in support of the Occupy movement and describes the absurdity of the pitched battles over raising taxes on the rich by a mere 3.5%:

 

Thus you can imagine my amazement this summer when I watched the Republicans in Congress push the United States to the brink of default - and the world to the brink of ruin - over whether to repeal a portion of the Bush tax cuts and raise my taxes by 3.5%. I know a lot of people with high incomes and even the conservatives among them were confused by that sequence of events. Here is a secret about rich people: we wouldn't have noticed a 3.5% tax increase. That is not only because there isn't a material difference between having $1 million and $965,000, which is obvious, but also because most of us don't actually know how much money we are going to make in a given year. Most income at that level is the result of profits rather than salary, whether it comes in the form of bonuses, stock options, partnership distributions, dividends or capital gains. Profits are unpredictable and they tend to vary wildly. At my own firm, the general rule of thumb is that if we are within 5% of our budget for the year, everyone is happy and no one complains. A variation of 3.5% is merely a random blip.

 

I was not amazed but disgusted when John Boehner and his crew tried to justify the extremity of their position by rebranding the wealthy as "job creators." While true in a very basic sense, it obscures the fact that jobs are a cost that is voluntarily incurred only as a result of demand. Hiring has no correlation at all to profits or to income - none. Let me keep more of my money without increasing customer demand and I will do just that - keep it. Perhaps I will spend a little more of it, though probably not, but even if I do it won't help the economy very much. Here is another secret of the well-to-do: we don't really buy much more stuff than everyone else. It may be more expensive stuff, sure, but I don't buy cars, or appliances, or furniture, or anything else more frequently than the average consumer. The things I do spend more money on are services such as travel, entertainment, restaurants and landscaping, none of which generate well-paying middle class jobs. There, in a nutshell, is the sad explanation of what has happened to the American economy over the last 25 years of "trickle down" economics.

[Recliner Pilot 61]

Another moron who is free to write a check to the gubmint for as much as he wants. Get in line behind Buffet, Assdart.

[drobeski 3,061]

 

gettn, can you fix that for me...tia

[Mungwater 588]

 

gettn, can you fix that for me...tia

 

http://www.youtube.com/watch?v=Y28yFxLydzU&feature=youtu.be

[Phurfur 70]

These people are really stupid, no wonder they want someone to take care of them.

[drobeski 3,061]

http://www.youtube.com/watch?v=Y28yFxLydzU&feature=youtu.be

Thank you, the whole concept of the 1% OWNED

[parrot 789]

He's right in one regard; for most 1%s the 3.5% increase in their marginal tax rate would be little more than an afterthought. Reduced capital gains rates and taxing qualified dividends as capital gains rather than ordinary income were the provisions of the Bush that really allowed them to put up some hay. If you offered them a deal where they would see a 3.5% increase in their rate on ordinary income but allowed them to keep the capital gains and dividend cuts, most of them would jump on that in about a nano-second.

[redtodd 7]

Hiring has no correlation at all to profits or to income - none.

 

[parrot 789]

 

While I agree that's a drastic over-statement, Schiff's position on the question is more than a little disingenuous as well. He acts like he employs people out of the goodness of his heart, not because they are essential to him doing what he does. His statement that he could just sell his company and those jobs would go away is ridiculous. He provides a service for which there is a demand, and if he were to sell his company the buyer would be looking to fill that same demand and would presumably face roughly the same labor demands in doing so. Or if he goes out of business someone else is going to step in and fill that niche. The idea that the wealthy are going to stop trying to increase their wealth because of a tax increase on the order of 5% is bullsh!t.

[Bert 1,092]

Here is a secret about rich people: we wouldn't have noticed a 3.5% tax increase.

 

Here is a secret about the uninformed: If we increased the tax rate on the top 1% to 100% we still would not bring in enough money to balance the budget.

[DankNuggs 305]

That guy is pretty spot on... He is dead on about hiring. Hiring is the result of expanded demand for a product or service. Its the result of the current workload increasing to the point that additional help is required. It has nothing to do with how much profit was made the year before. It really has nothing to do with how much anticipated profit is projected for this year.

 

That said, taxation DOES have an impact on the business climate and competitiveness.

 

He is also dead on that the griping about the bush tax cuts is way overblown... It shouldn't be that big a deal to increase them, the problem being if you are going to commit to that, you also have to commit to certain reasonable austerity measures at the same time. It signals that while you need to increase govt revenues, you want to do it in a responsible way.

[parrot 789]

That guy is pretty spot on... He is dead on about hiring. Hiring is the result of expanded demand for a product or service. Its the result of the current workload increasing to the point that additional help is required. It has nothing to do with how much profit was made the year before. It really has nothing to do with how much anticipated profit is projected for this year.

 

That said, taxation DOES have an impact on the business climate and competitiveness.

 

He is also dead on that the griping about the bush tax cuts is way overblown... It shouldn't be that big a deal to increase them, the problem being if you are going to commit to that, you also have to commit to certain reasonable austerity measures at the same time. It signals that while you need to increase govt revenues, you want to do it in a responsible way.

 

[DankNuggs 305]

While I agree that's a drastic over-statement, Schiff's position on the question is more than a little disingenuous as well. He acts like he employs people out of the goodness of his heart, not because they are essential to him doing what he does. His statement that he could just sell his company and those jobs would go away is ridiculous. He provides a service for which there is a demand, and if he were to sell his company the buyer would be looking to fill that same demand and would presumably face roughly the same labor demands in doing so. Or if he goes out of business someone else is going to step in and fill that niche. The idea that the wealthy are going to stop trying to increase their wealth because of a tax increase on the order of 5% is bullsh!t.

You are correct. But at the same time, people are not going to put at-risk capital up without the reasonable expectation of a profit. So railing about profits it pretty focking dumb. If owners aren't making a profit, they certainly aren't going to hiring anybody. If you stack the deck to the point that the risk/reward isn't there, people aren't going to be risking expansion. its pretty simple.

[MedStudent 56]

That guy is pretty spot on... He is dead on about hiring. Hiring is the result of expanded demand for a product or service. Its the result of the current workload increasing to the point that additional help is required. It has nothing to do with how much profit was made the year before. It really has nothing to do with how much anticipated profit is projected for this year.

 

That said, taxation DOES have an impact on the business climate and competitiveness.

 

He is also dead on that the griping about the bush tax cuts is way overblown... It shouldn't be that big a deal to increase them, the problem being if you are going to commit to that, you also have to commit to certain reasonable austerity measures at the same time. It signals that while you need to increase govt revenues, you want to do it in a responsible way.

 

you're spot on with this post.

[BudBro 117]

i liked it when he told that woman to build her own business like he did. you could see from her reaction, after she stopped bleating about bush tax cuts, that is what she really wants...she wants to be part of the 1%. no sh**t sherlock, who f*%kin doesn't? these morons in the ows crowd didn't go get a college degree to be pissing in a park on a tuesday night. they aspired to be one of the 1% also. the part that the liberal arts degree left out was economics...all of the them, not just 101. law school students don't know economics either, the case in point being the senate, the house, and the president of the united states. they should learn less about chomsky's "tear it apart" drivel, and more about how to make everyone successful.

 

part of buffet's new rule should be added that if you haven't earned a business degree from a university, you can't be a govt representative.

 

my hope for anybody in my life, including everyone on this bored, is that you all have a $250,000 tax bill at the end of 2012. not because you'd be overtaxed, but because you'd have earned $1,000,000. now get to it.

[nikki2200 4]

That guy is pretty spot on... He is dead on about hiring. Hiring is the result of expanded demand for a product or service. Its the result of the current workload increasing to the point that additional help is required. It has nothing to do with how much profit was made the year before. It really has nothing to do with how much anticipated profit is projected for this year.

 

That said, taxation DOES have an impact on the business climate and competitiveness.

 

He is also dead on that the griping about the bush tax cuts is way overblown... It shouldn't be that big a deal to increase them, the problem being if you are going to commit to that, you also have to commit to certain reasonable austerity measures at the same time. It signals that while you need to increase govt revenues, you want to do it in a responsible way.

 

I've seen so many times on this bored and from some of the right-wingers who don't actually participate in the business world that if corporate profits increase, so will jobs. Which is ludicrous. Like a company says, hey, we're making a lot of money, let's hire some people to burn some of it. Jobs increase when demand for the product or service increases and they need more employees to meet the demand. Now if a company is doing well, hiring freezes and layoffs and such will not happen. But they are not going to just go out there and hire people because they can afford to if they don't need them.

 

That being said, demand increases when consumption increases. And like he said, the rich do not consume way more relative to their income than the middle class do. Demand for jobs will increase when the middle class consumes more, and that won't happen while the economy is in the state it's in right now. So it's a vicious cycle. What usually got us out of these situations was some event (usually war) or the invention of the internet that increased the demand for goods or services. Someone better come up with something quick. And it better be something that can't be outsourced to China.

[MedStudent 56]

part of buffet's new rule should be added that if you haven't earned a business degree from a university, you can't be a govt representative.

 

So, successful businessmen without business degrees like Bill Gates, Larry Ellison, Michael Dell and Herman Cain should stay away from politics?

[KSB2424 3,083]

You are correct. But at the same time, people are not going to put at-risk capital up without the reasonable expectation of a profit. So railing about profits it pretty focking dumb.

That too folks.

 

Business create jobs to keep up with demand, the uptick in demand creates profits (at least tries too). It's a whole chicken/egg concept. The guy in the OP saying an absolute like "hiring has nothing to do with profits" is semantics. Of course it does, just not directly.

 

Here's a sports analogy (I love those). A college basketball coach recruits Blue Chip athelets to win games. However if said coach wins games he gets a raise and more tenure.

 

The OP is saying: "Recruiting Blue Chips has nothing to due with the coach's salary or tenure, it has to do with winning basketball games!" Well yeah, but without winning basketball games the coach doesn't get a raise and tenure.

 

Same here. Business hires to keep up with demand, but the end goal of keeping up with demand is PROFITS!

 

Semantics.

[Mungwater 588]

So, successful businessmen without business degrees like Bill Gates, Larry Ellison, Michael Dell and Herman Cain should stay away from politics?

 

What about Abe Lincoln, failed many times at business..

 

Isn't the buffet rule just some chain email?

[nikki2200 4]

That too folks.

 

Business create jobs to keep up with demand, the uptick in demand creates profits (at least tries too). It's a whole chicken/egg concept. The guy in the OP saying an absolute like "hiring has nothing to do with profits" is semantics. Of course it does, just not directly.

 

You know profit is revenue less expenses in layman's terms? Increased demand can increase profits. So can outsourcing to China. Or a drop in commodity prices. Or new technology that makes an operation run cheaper. Or tax cuts. How would any of the latter affect market demand?

[nikki2200 4]

What about Abe Lincoln, failed many times at business..

 

Isn't the buffet rule just some chain email?

 

Just a hunch, but I think if Warren Buffet wanted to get word out to people, he would find a different mechanism than a chain e-mail and the please pass it on or you will have bad luck for 7 years strategy.

[phillybear 364]

I've seen so many times on this bored and from some of the right-wingers who don't actually participate in the business world that if corporate profits increase, so will jobs. Which is ludicrous. Like a company says, hey, we're making a lot of money, let's hire some people to burn some of it. Jobs increase when demand for the product or service increases and they need more employees to meet the demand. Now if a company is doing well, hiring freezes and layoffs and such will not happen. But they are not going to just go out there and hire people because they can afford to if they don't need them.

 

That being said, demand increases when consumption increases. And like he said, the rich do not consume way less relative to their income than the middle class do. Demand for jobs will increase when the middle class consumes more, and that won't happen while the economy is in the state it's in right now. So it's a vicious cycle. What usually got us out of these situations was some event (usually war) or the invention of the internet that increased the demand for goods or services. Someone better come up with something quick. And it better be something that can't be outsourced to China.

 

The middle class can't buy goods and services because of the ever increasing rate of federal, state, and local taxes, and inflation vs. the stationary salaries they earn. The only reason they were consuming was due to credit and living beyond their means. Now, everybody is clutching their money in their fists and will not start to spend unless their tax rates actually start to decrease and lessen their burdens to an incompetent government that has no idea how to spend money with any logic or prudence.

 

Taxing the rich at a higher rate is actually breaking one the Ten Commandments, the one about coveting your neighbor's stuff especially his ass.

[KSB2424 3,083]

You know profit is revenue less expenses in layman's terms? Increased demand can increase profits. So can outsourcing to China. Or a drop in commodity prices. Or new technology that makes an operation run cheaper. Or tax cuts. How would any of the latter affect market demand?

You're not seeing the forest for all the trees.

 

Simply answer these two questions:

 

1. Why does Company X want to keep up with demand?

2. What is the ultimate end goal of any of it?

[nikki2200 4]

You're not seeing the forest for all the trees.

 

Simply answer these two questions:

 

1. Why does Company X want to keep up with demand?

2. What is the ultimate end goal of any of it?

 

You are making absolutely no sense. Of course companies want to generate profit. But how does profit drive demand for goods and services in the US market? I have absolutely no idea what you mean. And a fair share of corporate profit right now is coming from emerging markets in Russia and China, where demand does have the ability to expand. I don't even understand what you are saying.

[Mungwater 588]

You are making absolutely no sense. Of course companies want to generate profit. But how does profit drive demand for goods and services in the US market? I have absolutely no idea what you mean. And a fair share of corporate profit right now is coming from emerging markets in Russia and China, where demand does have the ability to expand. I don't even understand what you are saying.

 

Our company right now is willing to let market share slip in the US because there is much more to be made in the BRIC countries.

[KSB2424 3,083]

You are making absolutely no sense. Of course companies want to generate profit. But how does profit drive demand for goods and services in the US market? I have absolutely no idea what you mean. And a fair share of corporate profit right now is coming from emerging markets in Russia and China, where demand does have the ability to expand. I don't even understand what you are saying.

The question was never what you illustrated in bold. That's why you don't understand because you're in a different conversation or something.

 

I'm saying this guy (the dude in the OP that we are discussing) is not being completely honest and playing on semantics with this direct statement:

 

Hiring has no correlation at all to profits or to income - none

 

Hiring may not be DIRECTLY driven by profits, it may be driven by increased demand in whatever market, however the 'end game' is in fact profits.

[nikki2200 4]

The middle class can't buy goods and services because of the ever increasing rate of federal, state, and local taxes, and inflation vs. the stationary salaries they earn. The only reason they were consuming was due to credit and living beyond their means. Now, everybody is clutching their money in their fists and will not start to spend unless their tax rates actually start to decrease and lessen their burdens to an incompetent government that has no idea how to spend money with any logic or prudence.

 

Taxing the rich at a higher rate is actually breaking one the Ten Commandments, the one about coveting your neighbor's stuff especially his ass.

 

I do not share the view that everything that happens with our economy is tied to taxes.

 

I do agree that inflation is a big part of it and the government and banking industry focking with currency and interest rates to try to keep us out of a deep double-dip recession. With an unemployment rate at 9% and growing, getting rid of taxes is not going to fix anything. Doesn't matter if your tax rate is 0% if you aren't making any money.

 

Look at Australia. Their economy is absolutely booming right now and they pay well over half of their income in taxes. Their government makes liberals here look like militant conservatives. They also have a national pride in Australian brands and manufacturing and frown upon outsourcing. They are way behind North America and Europe on that front.

[KSB2424 3,083]

You are correct. But at the same time, people are not going to put at-risk capital up without the reasonable expectation of a profit. So railing about profits it pretty focking dumb. If owners aren't making a profit, they certainly aren't going to hiring anybody. If you stack the deck to the point that the risk/reward isn't there, people aren't going to be risking expansion. its pretty simple.

Nikki, I was simply expounding on this statement.

[phillybear 364]

I do not share the view that everything that happens with our economy is tied to taxes.

 

I do agree that inflation is a big part of it and the government and banking industry focking with currency and interest rates to try to keep us out of a deep double-dip recession. With an unemployment rate at 9% and growing, getting rid of taxes is not going to fix anything. Doesn't matter if your tax rate is 0% if you aren't making any money.

 

Look at Australia. Their economy is absolutely booming right now and they pay well over half of their income in taxes. Their government makes liberals here look like militant conservatives. They also have a national pride in Australian brands and manufacturing and frown upon outsourcing. They are way behind North America and Europe on that front.

 

The government can only get in the way and hurt the economy. They sure as hell don't want to lower taxes which would prevent them from creating slush funds to reward their friends and campaign supporters and contributors. The best way it can help is by doing nothing, absolutely nothing.

 

And I don't know about using Australia as a model for anything. Up until a few years ago, they were slaughtering their black native residents for sh!ts and giggles.

[SUXBNME 1,340]

I do not share the view that everything that happens with our economy is tied to taxes.

 

I do agree that inflation is a big part of it and the government and banking industry focking with currency and interest rates to try to keep us out of a deep double-dip recession. With an unemployment rate at 9% and growing, getting rid of taxes is not going to fix anything. Doesn't matter if your tax rate is 0% if you aren't making any money.

 

Look at Australia. Their economy is absolutely booming right now and they pay well over half of their income in taxes. Their government makes liberals here look like militant conservatives. They also have a national pride in Australian brands and manufacturing and frown upon outsourcing. They are way behind North America and Europe on that front.

Step away from the puter and get a job, you lazy bum.

[nikki2200 4]

The government can only get in the way and hurt the economy. They sure as hell don't want to lower taxes which would prevent them from creating slush funds to reward their friends and campaign supporters and contributors. The best way it can help is by doing nothing, absolutely nothing.

 

And I don't know about using Australia as a model for anything. Up until a few years ago, they were slaughtering their black native residents for sh!ts and giggles.

 

I'm just saying that the idea that raising or lowering taxes is going to fix everything is over-simplified political propaganda to try to get votes. Our economic problems are way bigger than anything increasing or decreasing taxes is going to affect.

 

When it comes to economics, I think North America and Europe could take a little guidance from Australia. What they do with their black folks is a different issue.

 

Step away from the puter and get a job, you lazy bum.

 

Hey man. I'm just trying to avoid taxes here.

[MedStudent 56]

If owners aren't making a profit, they certainly aren't going to hiring anybody.

 

That's not true in every case. If a company is not making a profit but sees an oportunity to make a profit by ramping up production to meet demand then it will hire the people they need to meet demand.

[parrot 789]

Nikki, I was simply expounding on this statement.

 

While that statement is true for the most part, the distinction needs to be made that even if owners ARE making a profit they aren't necessarily going to be hiring either. Businesses hire because they have to meet some market demand, not because they are feeling flush. Policies that seek to ensure profitability don't necessarily ensure employment, regardless of how much supply-siders would have us believe otherwise.

[jerryskids 5,212]

I've seen so many times on this bored and from some of the right-wingers who don't actually participate in the business world that if corporate profits increase, so will jobs. Which is ludicrous. Like a company says, hey, we're making a lot of money, let's hire some people to burn some of it. Jobs increase when demand for the product or service increases and they need more employees to meet the demand. Now if a company is doing well, hiring freezes and layoffs and such will not happen. But they are not going to just go out there and hire people because they can afford to if they don't need them.

 

 

I agree with KSB; this is an inanely naive position which reeks of semantics. I suppose it works for the analogy of: you can pay a worker $1 to build a widget you sell for $2, so you only hire the person if somebody wants the widgets. Duh, that is simple causality. Many jobs aren't that simple though. Any project which provides future value (new product development, infrastructure improvement, a myriad of others) is done because it is expected to ultimately increase profit, but the ability to invest in such projects is most assuredly affected by the current financial position of the company.

 

Dumb.

[nobody 2,045]

I don't get the "brink of default" stuff. You guys can't recogonize political posturing when you see it by now.

 

Tell me this... If you held all the power in a negotiation. ie, the other party to the negotiation needed you to acquiesce or they faced ruin and were obviously afraid you wouldn't bend and they were willing to give you concessions, and they had no other recourse, why on earth would you not just hold out until the last possible minute and try to get as many concessions as possible?

 

There was no way they weren't going to raise the debt ceiling.

[nobody 2,045]

I also don't get why he says 5% is something to worry about, but he's willing to give away 3.5% of that buffer in taxes. That's an odd way to manage a budget. Most companies would kill for a 3.5% increase in profit.

[nikki2200 4]

I agree with KSB; this is an inanely naive position which reeks of semantics. I suppose it works for the analogy of: you can pay a worker $1 to build a widget you sell for $2, so you only hire the person if somebody wants the widgets. Duh, that is simple causality. Many jobs aren't that simple though. Any project which provides future value (new product development, infrastructure improvement, a myriad of others) is done because it is expected to ultimately increase profit, but the ability to invest in such projects is most assuredly affected by the current financial position of the company.

 

Dumb.

 

First of all, that's not what KSB said.

 

Second of all, what the guy was trying to say and taken in context was just lowering taxes on the wealthy is not going to create jobs. Job creation is tied to demand for goods and hence investing. The only reason a company would expand is if there is demand they can't fill or projected demand. If there is a favorable projected return, they will typically make the investment, regardless of their current profits, as long as they are not on the verge of bankruptcy. Talking about normal companies. They decide to make investments based on the projected returns. Period. Even if a company is making record profits, they aren't going to invest in an expansion with a 5% IRR on it. And even if companies aren't in a bit of a slump, they will most likely invest in something with say 35% or higher, especially if they are looking to increase revenue. Capital works differently than expense. Yes companies will reduce their expense budgets due to decreasing profits. That is not true to the same extent for capital investment. Besides they already get tax benefits from investing capital so the whole argument about dropping taxes will increase capital investment is

 

Thirdly, I am not dumb.

[SUXBNME 1,340]

 

Thirdly, I am not dumb.

you sure bout that?

 

You're just a big lump of flotsam and jetsam polluting our bored.

[nikki2200 4]

you sure bout that?

 

Yes.

[SUXBNME 1,340]

Yes.

Read the edited post....Dummy