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wardd
07-21-2012, 12:22 PM
krugman



Brad DeLong points us to an amazing Fortune reprint (http://features.blogs.fortune.cnn.com/2012/05/06/classic-top-500-executives/)
: a portrait of American executives in 1955, back when inequality was much lower and tax rates at the top much higher than they are today. The business leaders of the time led straitened lives by historical standards — they were substantially poorer than the previous generation of executives:
The executive’s home today is likely to be unpretentious and relatively small–perhaps seven rooms and two and a half baths. (Servants are hard to come by and many a vice president’s wife gets along with part-time help. So many have done so for so long, in fact, that they no longer complain much about it.)

The large yacht has also foundered in the sea of progressive taxation. In 1930, Fred Fisher (Bodies), Walter Briggs, and Alfred P. Sloan cruised around in vessels 235 feet long; J. P. Morgan had just built his fourth Corsair (343 feet). Today, seventy-five feet is considered a lot of yacht. One of the biggest yachts launched in the past five years is the ninety-six-foot Rhonda III, built and owned by Ingalls Shipbuilding Corp., of Birmingham, Alabama. The Rhonda III cost half a million dollars to build, and the annual bill for keeping a crew aboard her, stocking her, and fueling her runs to around $130,000. As Chairman Robert I. Ingalls Jr. says, only corporations today can own even so comparatively modest a craft. The specifications of the boat that interests the great majority of seagoing executives today are “forty feet, four people, $40,000.” In this tidy vessel the businessman of 1955 is quite happily sea-borne.

According to modern conservative dogma, this kind of punishment of “job creators” should have brought economic progress to a screeching halt. Yet according to Fortune, executives continued to work hard — and the postwar generation was actually a period of economic progress that has never been matched.Somehow, John Galt never made an appearance.

Michael D. Storey
07-22-2012, 11:45 AM
in 1955 automation was costing over a million jobs in the industrial sector each quarter. This was at a time when many rural poor from the south were moving north to cities, looking for work,
I happen to feel that we are all better off because of the move to automation of what were then still largely manual jobs. Much safer, lower cost to produce, the growth of the mass market, etc; there are many results.
This collision of events helped to set the stage for the civil unrest of the 60's that led to anti-discrimination statutes that took another two decades, at least, to produce any real change, and the struggle continues.
I do not feel that the suffering that happened along the way can be dismissed, but no birth comes without pain.

Keith Wilson
07-22-2012, 12:42 PM
That article is absolutely amazing. The comparison to today's 1%, and the relative similarity of their way of life to that of the rest of us, is worthy of note. We really have returned to the practices of a previous age, and some of the attitudes as well.

http://thebluestate.typepad.com/.a/6a00d83451b48269e201630282fe18970d-500wi

Andrew Craig-Bennett
07-22-2012, 04:34 PM
Very thought provoking.

wardd
07-22-2012, 06:47 PM
those of a certain age that were in the workforce in the 50's, 60's and 70's will remember a different atmosphere than exists to day

JBreeze
07-22-2012, 08:13 PM
I wish I could find a chart that showed income and wealth back to the 1800’s. I would love to see what percentage of US wealth was held by the top 1% back in the 1850-1900 period when the palatial “summer cottages” were built in Newport, RI by the Vanderbilts,etc. Here is a website if you want to see what opulence looked like back then:

http://www.newportmansions.org/explore

In any case, I don’t think the US can significantly fix its fiscal problems with marginal changes in the marginal tax rates. What I would like to see is an annual wealth tax imposed on net worth, say at the rate of 1% of net worth over $ 1million. Heck, that’s only $10K /million/yr,which isn’t more than an irritant to the well off.

Here are some projections done by Bruce Krasting taxing net worth at 2% for folks with assets over $5 million. Again, it doesn’t sound too bad for the vast majority of the US population…but wait! Buffett would have to pay $800 million/yr on his $40 billion net worth; the Kochs $1 billion/yr, etc. And it adds up to real money each year.

http://brucekrasting.blogspot.com/2012/07/soak-wealth-not-income.html

"If a 2% wealth tax was applied to everyone who had a net worth in excess of $5m it would add up to about $700B a year. That’s just about the right amount to get the budget to where it starts to make sense. This tax increase would not come out of current income, therefore the consequences to the economy would be muted versus a similar sized income tax increase..."

Increasing marginal tax rates on high earners will make the 99% feel better. But the top 1% income earners often aren’t in the top 1% year after year throughout their careers. And the increases would be chump change to the really wealthy anyways. My strong preference is for a wealth tax, as this is where the real money is and it may slow down the concentration of assets by the rentiers, who can live generation after generation because they were concepted by the right parents.

wardd
07-22-2012, 08:17 PM
I wish I could find a chart that showed income and wealth back to the 1800’s. I would love to see what percentage of US wealth was held by the top 1% back in the 1850-1900 period when the palatial “summer cottages” were built in Newport, RI by the Vanderbilts,etc. Here is a website if you want to see what opulence looked like back then:

http://www.newportmansions.org/explore

In any case, I don’t think the US can significantly fix its fiscal problems with marginal changes in the marginal tax rates. What I would like to see is an annual wealth tax imposed on net worth, say at the rate of 1% of net worth over $ 1million. Heck, that’s only $10K /million/yr,which isn’t more than an irritant to the well off.

Here are some projections done by Bruce Krasting taxing net worth at 2% for folks with assets over $5 million. Again, it doesn’t sound too bad for the vast majority of the US population…but wait! Buffett would have to pay $800 million/yr on his $40 billion net worth; the Kochs $1 billion/yr, etc. And it adds up to real money each year.

http://brucekrasting.blogspot.com/2012/07/soak-wealth-not-income.html

"If a 2% wealth tax was applied to everyone who had a net worth in excess of $5m it would add up to about $700B a year. That’s just about the right amount to get the budget to where it starts to make sense. This tax increase would not come out of current income, therefore the consequences to the economy would be muted versus a similar sized income tax increase..."

Increasing marginal tax rates on high earners will make the 99% feel better. But the top 1% income earners often aren’t in the top 1% year after year throughout their careers. And the increases would be chump change to the really wealthy anyways. My strong preference is for a wealth tax, as this is where the real money is and it may slow down the concentration of assets by the rentiers, who can live generation after generation because they were concepted by the right parents.

shouldn't we be beyond the 1800"s?

JBreeze
07-22-2012, 08:27 PM
shouldn't we be beyond the 1800"s?

Huh? I said I was curious about how bad it was then, say compared to the 1920s and now.

How do you feel about a contemporary wealth tax proposal ?

wardd
07-22-2012, 08:29 PM
Huh? I said I was curious about how bad it was then, say compared to the 1920s and now.

How do you feel about a contemporary wealth tax proposal ?

it wouldn't affect me

JBreeze
07-22-2012, 08:36 PM
it wouldn't affect me

So do you think it has a better chance of making it through the moribund congress than increasing the top marginal tax rates to 50-80% ? Is it "fairer" ?

wardd
07-22-2012, 08:38 PM
So do you think it has a better chance of making it through the moribund congress than increasing the top marginal tax rates to 50-80% ? Is it "fairer" ?

if you need money to pay bills where better to go get money than where the money is?