Gunpowder, tanks, airplanes all changed the rules of engagement in warfare. Folks that didn't adapt got slaughtered.
In the same way Citizens United and the Internet have changed the rules of engagement in Presidential Elections.
It's not just billionaire Republicans Democrats need to keep up with, it is other countries around the world trying to influence our elections. We rail against social media for not controlling false ads but setting the rules for censorship based on content is exactly what former Communist states do to create fake democracies.
The current uproar among Democrats about Michael Bloomberg, an extremely wealthy New Yorker is particularly ironic. The single Democratic President who did the most for the Democratic party and folks at the lower end of the economic spectrum was FDR, another extremely wealth New Yorker. FDR created a scheme of government that dominated for nearly 50 years, a period when we could win WW II, fight wars in Korea and Vietnam, fund Social Security, and Unemployment Insurance, have a consistently growing economy with living standards of workers and the middle class higher than at any time since, and still end with the National debt exactly where it started.
Citizens United started the change in the rules of engagement. As long as Republicans have some semblance of power in Washington nothing is happening on Citizens United. To overturn Citizens United the Democrats need benevolant billionaires like FDR.
But even reversing Citizens United is not going to really resolve the problem. It does not address the problem of other countries, who could care less what our law says, using the Internet to spread disinformation.
We need to require any political ad reveal the actual people behind it. Not the PAC, or the Corporation. The names of the actual people. If its a lot of donors working together they can post a website with the list of names. But every single individual must be identified.
That will give Social Media a mechanism to draw distinctions, not based on content, but based on non-disclosure. They can reject based on failure to disclose or false disclosure. It is then up to us as voters to monitor and identify folks trying to pedal false information.
History is littered with the cultures obliterated because they were unable to adapt to changes in the rules of engagement. Will Democrats be added to that list?
If this makes sense to you, don't just like it - share it. We don't have a lot of time to figure this out if we want to be prepared to counter the inundation of falsity that will occurs this summer and fall.
Saturday, February 22, 2020
Thursday, February 20, 2020
Bernie and Elizabeths 2% Wealth Tax
Democrats controlled tax policy from 1933 to the early 1980's. They had lots of income tax brackets, as your income increased, each time your income passed a certain point your additional income was taxed at a higher rate. Really excessive incomes were taxed at over 70% during that period. In that period GDP growth was far better than it has been since, the National debt ended where it began and it was the golden age for working folks - income inequality was at all time lows and working folks incomes were at all time highs.
In the early 1980's Ronald Reagan began cutting taxes, and in particular eliminating high tax brackets, which has been the norm now for 40 years, - nobody pays more that 39%. The result - our National debt has risen in those 40 years from 30% of GDP to somewhere around 108% or GDP. Income inequality is at all time highs, working wages have stagnated while the rich get fabulously wealthy. A recent study found that the middle class has paid an ever larger part of income taxes the last 40 years.
So why are Bernie and Elizabeth fixated on a 2% tax on wealth? Taxing static wealth worked in England 100 years ago because wealth was primarily held in huge country estates. They couldn't hide their estates or move their wealth out of the country.
That world is long gone. Most wealth today is in ownership interests. Rich folks who don't want to pay a 2% tax on their wealth can simply move their wealth out of the country, or hide it in shell corporations, or move themselves and their wealth out of the country.
Income taxes are much harder to avoid, which I presume is why Billionaire Bloomberg is savvy enough to propose increasing income taxes.
Why are Bernie and Elizabeth so adverse to going back to the kind of income tax system we had after World War II that produced the golden age for working people along with a strong economy, focused on income instead of wealth?
In the early 1980's Ronald Reagan began cutting taxes, and in particular eliminating high tax brackets, which has been the norm now for 40 years, - nobody pays more that 39%. The result - our National debt has risen in those 40 years from 30% of GDP to somewhere around 108% or GDP. Income inequality is at all time highs, working wages have stagnated while the rich get fabulously wealthy. A recent study found that the middle class has paid an ever larger part of income taxes the last 40 years.
So why are Bernie and Elizabeth fixated on a 2% tax on wealth? Taxing static wealth worked in England 100 years ago because wealth was primarily held in huge country estates. They couldn't hide their estates or move their wealth out of the country.
That world is long gone. Most wealth today is in ownership interests. Rich folks who don't want to pay a 2% tax on their wealth can simply move their wealth out of the country, or hide it in shell corporations, or move themselves and their wealth out of the country.
Income taxes are much harder to avoid, which I presume is why Billionaire Bloomberg is savvy enough to propose increasing income taxes.
Why are Bernie and Elizabeth so adverse to going back to the kind of income tax system we had after World War II that produced the golden age for working people along with a strong economy, focused on income instead of wealth?
Demonizing a Group to Fire up Your Base
Democrats rightly deplore what President Trump has done in demonizing immigrants to fire up his base.
Why is OK to demonize billionaries to fire up a base?
Sure there are a few billionaires who have actively sought to shape the law to their advantage - the Koch brothers and Rupert Murdoch come to mind. But the vast majority of billionaires are folks who just took the rules politicians created and went about their business building a life within those rules, and were very good at it.
Billionaries didn't cause our problems. A google search says there are 607 billionaires in the United States, they have one vote apiece. Our problems in this country sit squarely on the shoulders of voters and the politicians they chose.
One can plausibly argue that the particular billionaire on the stage at the Nevada Democratic debate has done more as a wealthy private citizen to make progress on gun control and climate change than all the politicans on the stage put together. He is also the only one to propose raising income taxes on the wealthy (which would be taxing himself).
Hitler didn't lead the German people into disaster by hypnosis. He was just simply particularly adept at recognizing their gut level prejudices and massaging them.
Demonizing any group reflects badly on any politician who relies on it, and, in my estimation, on the voters who do not call him/her on it.
Why is OK to demonize billionaries to fire up a base?
Sure there are a few billionaires who have actively sought to shape the law to their advantage - the Koch brothers and Rupert Murdoch come to mind. But the vast majority of billionaires are folks who just took the rules politicians created and went about their business building a life within those rules, and were very good at it.
Billionaries didn't cause our problems. A google search says there are 607 billionaires in the United States, they have one vote apiece. Our problems in this country sit squarely on the shoulders of voters and the politicians they chose.
One can plausibly argue that the particular billionaire on the stage at the Nevada Democratic debate has done more as a wealthy private citizen to make progress on gun control and climate change than all the politicans on the stage put together. He is also the only one to propose raising income taxes on the wealthy (which would be taxing himself).
Hitler didn't lead the German people into disaster by hypnosis. He was just simply particularly adept at recognizing their gut level prejudices and massaging them.
Demonizing any group reflects badly on any politician who relies on it, and, in my estimation, on the voters who do not call him/her on it.
Tuesday, February 18, 2020
The Failure of Trickle Down Economics - Japans example
Japan has an income tax similar to ours. Japan built up a booming economy after World War II, by the 1980's Japanese high flying business folk were buying skyscrapers in New York and Golf courses at Pebble Beach. During that period the top marginal tax rate on the highest income of the wealthiest Japanese taxpayers averaged 77% and went as high as 85%.
The fantasy the gripped the United States in the 1980's that dropping the top tax rate on the wealthy would spark massive economic growth also struck Japan. Like the US Japan cut the number of income tax brackets and in Japan the tax rate applicable to the highest income of wealthy folk dropped to 66% in 1984. then on 35% by 2002. Currently its top income tax rate is 45% of income over $40,000,000 Yen a year. ( https://www.japan-guide.com/e/e2206.html )
Since Japan started cutting the top income tax rate on wealthy folk, although some Japanese companies have thrived as global industries, as a country Japan has stagnated. Their National Debt is currently up near 250% of annual GDP and rising due to constant borrowing to stimulate the sluggish economy.
Japan has been unable to figure out how to pull their economy out of the doldrums. History suggests an answer. Incentivez production by taxing the money that comes out of Corporations, rather than taxing the money in corporations.
Tax policy in both the US and Japan is formulated by folks near the top of the income scale and most don't seem capable of recognizing the historical correlation between cutting taxes on the wealthy and ensuing economic stagnation, that taxing excessive income at very high rates stimulates economic activity and makes everyone richer. They also seem unwilling to recognize that taxing corporations just because they have a lot of money is counter-productive.
When Shinzo Abe became Japanese prime minister in 2012, to address the countries massive government debt he took the politically expedient route, imposing a tax on consumption, rather than force a tax increase on the wealthy. It was the worst possible choice for developing a diverse economy - consumption is the engine that drives modern economies, every dollar of tax is a dollar less available to the private economy.
The latest Abe increase in the consumption tax took effect last year. The numbers are now in and Japan's GDP shrunk 6.3% last year.
Japan seems incapable of figuring out that high marginal tax rates on excessive income encourages economic expansion, while taxing consumption undermines the economy.
Will we be able to figure it out?
The fantasy the gripped the United States in the 1980's that dropping the top tax rate on the wealthy would spark massive economic growth also struck Japan. Like the US Japan cut the number of income tax brackets and in Japan the tax rate applicable to the highest income of wealthy folk dropped to 66% in 1984. then on 35% by 2002. Currently its top income tax rate is 45% of income over $40,000,000 Yen a year. ( https://www.japan-guide.com/e/e2206.html )
Since Japan started cutting the top income tax rate on wealthy folk, although some Japanese companies have thrived as global industries, as a country Japan has stagnated. Their National Debt is currently up near 250% of annual GDP and rising due to constant borrowing to stimulate the sluggish economy.
Japan has been unable to figure out how to pull their economy out of the doldrums. History suggests an answer. Incentivez production by taxing the money that comes out of Corporations, rather than taxing the money in corporations.
Tax policy in both the US and Japan is formulated by folks near the top of the income scale and most don't seem capable of recognizing the historical correlation between cutting taxes on the wealthy and ensuing economic stagnation, that taxing excessive income at very high rates stimulates economic activity and makes everyone richer. They also seem unwilling to recognize that taxing corporations just because they have a lot of money is counter-productive.
When Shinzo Abe became Japanese prime minister in 2012, to address the countries massive government debt he took the politically expedient route, imposing a tax on consumption, rather than force a tax increase on the wealthy. It was the worst possible choice for developing a diverse economy - consumption is the engine that drives modern economies, every dollar of tax is a dollar less available to the private economy.
The latest Abe increase in the consumption tax took effect last year. The numbers are now in and Japan's GDP shrunk 6.3% last year.
Japan seems incapable of figuring out that high marginal tax rates on excessive income encourages economic expansion, while taxing consumption undermines the economy.
Will we be able to figure it out?
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