had an interesting post up about a year or so ago on the upper reaches of the income bracket. Put these two points together:
1. We tend to evaluate our success and well-being comparatively.
2. The income curve near the top has a very steep slope.
Result: People who are doing quite, quite well are often comparing themselves to others who are doing a great deal better, and thus, they mistakenly think they’re not doing that well at all.
This may account for a lot of the feelings of victimization we keep hearing from the 1%.
In Massachusetts, despite a brief period of discussing income inequality, the Commonwealth is back to status quo ante, with little in the way of practical policies addressing the issue, as I write this.
IMHO, this goes far to illustrate the credibility problems facing progressives; they’re simply not trusted in blue-collar communities, in the absence of tangible policies addressed to their specific needs.
petrsays
Your first assumption is that politics has ‘devolved’ into something more “darwinistic” (whatever it is you think you mean by that…) when one only has to hark back to supporters of John Adams claiming Thomas Jefferson was the anti-christ to know that such an ideal past never obtained.
Your second, eminently more understandable, assumption is that most voters think like you. They do not. As a former member of the ‘blue collar communities’ I can attest that they do not have the luxury of voting on trust. Those who are fortunate enough to belong to a union (a dwindling population… hm?) are reliably Democratic because they know the Democrats are with them and the Republicans want to walk back big labor. Those not in a union are reliably hen-pecked (or in the parlance my father used ‘nickle-n-dimed’) to the extent that they live in a perpetual state of fear: constantly looking over their shoulder for the next indignity and constantly kept on edge by the bosses in order to prevent unionization; in effect, the bosses go out of their way, often, to make their lives much worse in order that unions don’t come in an make them a little better. Blue is a cruel collar.
liveandletlivesays
are here . It would be helpful if they were broken down according to income range and other such stats to better analyze them, but I can see why paulsimmons might think this. Stats or no stats, you get this impression from talking to people. Recent reading on my Facebook page includes a rant from an averaged incomed person believing they were the 1% we speak of when talking about unfair taxation, and they believe they are the subject of our wish to increase their taxes. If only people would pay attention and learn what is really going on. I live in Scott Brown territory, and it can be like banging your head against the wall sometimes. But to expand on what paulsimmons is saying….. I really don’t have a whole heck of a lot to offer independents on how their lives have improved since 2008. Most of them had health insurance already, they’ve seen nothing but increases in the cost of living, friends and family losing jobs, Higher state and local taxes, and cuts to schools. If they happened to place faith in Barack Obama in 2008, I think it’s entirely possible they won’t do it again.
Mr. Lynnesays
…that if wealth is already stratified, grading tax breaks in favor of the already wealthy would only exacerbate the inequality, even at the top. More from Ezra:
So even as the rich were making more and more money, they were paying lower and lower effective tax rates. Sweet deal.
Check out the intervals
60-69
76-79
82-89
92-00
02-07
Don’t you find that strange? If I wanted to make the point Ezra is making and 70-75 had data which went contrary [along with 80-81, 90-91, etc], I’d drop those points. Maybe the data just wasn’t available, but still — you use the ‘X9 as anchors — ’69 becomes the beginning of the next set, ’79, etc.
They’re not excluding data, they’re looking at how income gains went to the top 1% during periods of economic expansion. 1960 to 1969 is a period of economic expansion; ’76 to ’79 is a period of economic expansion; ’82 to ’89, etc., etc. The only period they don’t include is Nov. 1970 through Sept. 1973 which I agree is a problem, but it’s not an issue of regular intervals.
petrsays
Check out the intervals
60-69
76-79
82-89
92-00
02-07
Don’t you find that strange?
… but I think ’82 was when Reagan slashed the top rate to something like 28%. ’92 was when Clinton brought it back up to the upper 30% and 2002 was the Bush tax cuts went into effect. Just from a statistical point of view it might make sense to do it in this manner simply to avoid discontinuities. I dunno… But I don’t think it strange.
roarkarchitectsays
This chart shows the emergence of “S” corp filings by individuals.
Prior to 1984 most small/mid size corporations were “C” corporations- in 1984 the law changed. S corporations file as individuals not corporations.
In a lot of cases “S” corps owners while seeming to make a lot of money don’t. A S corporation has a profitable year and reinvests this income in operations – the individuals who own this corporation will pay taxes on this investment by the corporation as it’s profit. The don’t get this money as a distribution.
SomervilleTomsays
I’ve operated one of those S-corporations.
I’m not sure how you conclude that when an S-Corp “reinvests this income in operations”, it isn’t tax deductible. I always found it fairly straight-forward: the advantage of incorporating a small business (in those days as a C- or S-Corp) was that every expenditure that could reasonably be associated with the business was then tax deductible. Each of the ways to “invest in operations” that I can think of — hire new employees, retain more third-party services, buy or lease more sales or production space — absolutely are tax deductible for an S-Corp. I therefore think you are mistaken in this matter.
Secondly, the change to encourage S-corporations greatly aided the owners. Personal income rates were (and are) significantly lower than corporate tax rates, and so this change amounted to a significant tax cut for those owners.
Thirdly, I don’t see what any of this has to do with the information presented in this thread. My admittedly cursory read of the various data sources (like the CBO) leads me to conclude that these data sources have already taken these factors into account.
Finally, the last chart from mr-lynne showing that the top 1% has taken nearly all of the income gains from 2002-2007 is “the bottom line” — after all the hand-waving and obfuscation, the top 1% pocketed 65% of the income gain.
This law shows the intense and rapid concentration of wealth by the top 1%. The tax law changes — including the creation of S-corps — certainly helped accelerate that concentration. I’m not sure that’s the point you were making, though.
If you purchase a building you expense it over 39 years – if you purchase new HVAC equipment you expense it over39 years.
If you buy new equipment for your restaurant you expense it over 15years.
S corp expenses are not different than C corp
SomervilleTomsays
You’re ignoring the Chapter 179 deductions that go a long way towards expensing that restaurant equipment (not to mention computers and such). The truth is that the government has already bent over backwards to help true small businesses.
As you observe, these are all the same for S-corp and C-corp entities.
On the other hand, C-corps are much better able to carry losses forward (at least they were when I last looked). So the rule-of-thumb for developing and emerging businesses was to organize as a C-corp during the launch years, so that operating losses were more fully protected, and then move those assets over to a companion S-Corp as they become profitable — taking advantage of the significantly lower tax rates available to S-Corps.
The bottom line remains that the tax law changes that created the S-Corp are extraordinarily beneficial to the owners of those S-Corps.
Your claim that S- versus C-corp somehow explains away the extreme wealth concentration of recent years is, in my view, incorrect.
The way you described the tax consequences of investing for S corps is completely, 100% wrong. I know – I’ve been running my own S corp for the last 10+ years. You haven’t got the first clue of what you’re talking about.
SomervilleTomsays
Precisely
Christophersays
You’ve complained often that progressives don’t advocate for blue collar workers, but I think I speak for many progressives and I say that leaves me scratching my head, because from where I sit, our policies DO benefit blue-collar workers. WE are the ones constantly fighting for working people whereas God knows the other side certainly isn’t. What things would like us to advocate that you don’t think we are addressing? What do we do to make working people not trust us, in your opinion?
sabutaisays
2008 was a vote against George W. Bush. Obama won, Hillary would have won…I think Richardson and Edwards would have had a fair shot depending on scandal level at the time. Part of that dislike was rooted in disastrous managing of the economy, but how deep could it have been if millions turned around and voters for those policies’ apologists two years later?
centralmassdadsays
I think that this is just so. It has been a great many years since there was a national election that was clearly “for” a party rather than merely “against” the other. 1994 was a reaction to Democratic corruption and ineffectiveness, and came closest of the recent elections to acheiving a “mandate” for the victors. But it didn’t and the Contract With America “mandate” fizzled quickly. Since then, we have had a series of negative-reaction elections, in which one side wins by virtue of being not the other. 1998. 2000. 2006. 2008. 2010.
Which gives us all whiplash, tends to reinforce the trend of power to the wings of the parties, and is damaging to the polity IMO.
whosmindingdemintsays
The Tea Party, for lack of a better phrase, capitalized on populist discontent among working people. They have successfully gotten the working class to vote against its own interests in a couple of ways:
The upward mobility narrative has been deformed into a wannabe riff – people aspire to what they wish to become with no recognition of where they are. There is no serious discussion of working class values in this country because it is now undesirable to be working class. The working class in America is seen as the underclass. Liberals have exaserbated this, particularly of late, by framing every issue as a need to protect the “middle-class.” Its a little nauseating to here them from time to time choke on the the word class if it is preceded the wod work – thus working families is ok, or low-to-middle income, but adding the word class is a third rail. The number of poor people is rising at an alarming rate and liberals seem more interested in saving amiddle class that is perpetually falling behind, under or through the cracks. I pick on liberals because the motives of the right are indisputable.
It is a fundamental lack of honesty. That element of Occupy that is helping people stay in their homes gets it. They may or may not call themselves progressives, but they do not shrink from the attacks by the right. Its been years and there is no coherent public policy to keeproofs over that growing segment of the “middle-clas” that are a day away from iving on the street. Its no joke. Stop singing a siren song to an idealized image of the middle class and focus on the real problems. This will require acknowledgement of the working class.
Mr. Lynnesays
… that they capitalized on populist discontent, it should be noted that the particular discontent was not ‘new’ and rather tea party issues look an awfully lot like regular GOP issues, which become issues of discontent whenever a Democrat wins anything. If there were ‘working class’ issues in the tea party, they were almost instantly hijacked.
whosmindingdemintsays
I highly recommend “The Strange Death of Liberal England, 1910-1914” by George Dangerfield. The entire edifice of Liberalism from Gladstone to WW1 collapsed allowing Labor, trade unions and the welfare state to set the tone through to Thatcher. What is happening today is just the opposite: failing liberalism is allowing the extreme right to fill the vacuum.
That’s my 2 cents.
Mr. Lynnesays
I don’t disagree much here. I do think, however, its important to recognize exactly how it is that liberalism is failing. Liberalism is failing because the right recognized something about our system of government that the left is proving slow to learn. Our system is great at stopping policy from being enacted, causing two things – 1) liberals have problems passing even popular legislation and 2) the left has been fooled into thinking they can overcome this by making sure to tack right. Both of these phenomena conspire to make sure that liberal policies in general aren’t enacted – and as such, these ‘phantom’ policies can’t be said to have ‘failed’.
paulsimmonssays
Rather than 2008 , I think that the 2006 cycle is a better example. To his credit, Howard Dean learned from his 2004 candidacy – that disconnected progressive activists repel far more voters than they attract – and committed the Democratic Party to a “Fifty State” program, premised upon creating a bottom-up, grassroots accountable political structure. The 2006 payoff from Dean’s efforts led to Democratic gains across the board, and created the circumstances that led to the Obama victory in 2008.
This explains the political traction of Mitt Romney, and locally, Scott Brown. In the absence of credible and organized neighbor-to-neighbor field work, Republicans win by default, because outside progressives cannot and do not relate to local nuances and local experiences.
I devoutly hope that the President and his top aides rectify this in the 2012 cycle, but he will face a lot of resistance within the Party structure; the so-called grassroots efforts funded by George Soros will do nothing but reinforce Republicans on the ground.
In the absence of a permanent structure embedded in local civic culture, run by and on behalf of local commmunities it is not difficult for the Right to organize those who rightfully feel abandoned. To the degree that Democrats presume the support of those they have abandoned, they deserve what they get.
…and, for what it’s worth, over a two-year election cycle, it costs a lot less to generate and expand locally-accountable political organizations than it does to start from scratch with the money-driven campaigns the way we do now.
SomervilleTomsays
I’m not following your logic here.
Specifically (emphasis mine):
In the absence of a permanent structure embedded in local civic culture, run by and on behalf of local commmunities it is not difficult for the Right to organize those who rightfully feel abandoned. To the degree that Democrats presume the support of those they have abandoned, they deserve what they get.
Are you seriously claiming that people who supported Barack Obama in 2008 are now supporting Mitt Romney because they “rightfully feel abandoned”? Like whom? Over what issues?
I don’t mean to sound argumentative, I just can’t make ANY sense of this. Are you really saying that idealistic Democrats who are disappointed that GITMO is still open or that the war criminals of the prior administration were not prosecuted are going to support Mitt Romney and Scott Brown????
I don’t think so.
paulsimmonssays
All Politics is Local: More than twenty years ago, William Grieder described how the Democratic Party abandoned grassroots field organizing, in favor of media campaigning. Exclusive of Dean’s efforts (since dismantled) there has been no change.
It’s the [Local] Economy: To the degree that progressive concern for working-class Americans is primarily rhetorical; and too many progressives first and foremost identify more with Richard Florida than Walter Reuther, Democrats operate as rightwing outreach mechanisms. The presumption that self-entitled elitists are owed working-class support beggars the imagination.
“Idealistic Democrats who are disappointed that GITMO is still open or that the war criminals of the prior administration were not prosecuted” are, at best a miniscule portion of the people within the cohorts I described, and to his credit, Obama is not going to waste sleep worrying about Code Pink.
In any case, it’s irrelevant to my point: Politics at its base is profoundly personal and emotional; and the irony of modern technology and social media is that we’ve returned to pre-radio days where the most effective tool is personal contact by people with an organic connection to voters. Social media is a great communication augmentation device, but it doesn’t replace warm bodies who know the local nuances. Absent such contact, it’s dangerous to presume support.
This is particularly true when Republicans are exploiting the vacuum on the ground, by organizing through existing institutions, and using populist anti-progressive sentiment as an organizing tool.
The issue is not ideological but political competence; at a time when the economic recovery is skewed towards upper and upper-middle income groups, others are subject to exploitation (as in union support for casino gambling in Massachusetts in the context of 40%+ unemployment in the trades).
It simply happens that the Right invested in grassroots infrastructure.
One does not have to agree with an adversary to understand his tactics (or one’s own side’s objective liabilities).
kbuschsays
Your two links above don’t provide actual data that young activists from Park Slope wearing bright orange baseball caps were the reason Iowans didn’t warm up to Howard Dean. And yes, yes, the harassment by phone, cell phone, mail, email, and doorbell that has become the modern Democratic Party version of a political campaign seems risky to me, too.
But is it? I don’t know.
And people whose day jobs consist of trying to win elections don’t seem worried.
Data anyone?
paulsimmonssays
…was to self-entitled out-of state activists operating on Dean’s behalf who alienated locals in Iowa. A dynamic, I might add, that Dean corrected during his DNC tenure.
It was cultural snark, not meant specifically to yuppified Brooklyn, by the author of the linked post.
kbuschsays
But I have no idea whether you are right or wrong. You’ve found someone who agrees with you. That’s comforting, but it still falls short of convincing evidence.
whosmindingdemintsays
I would say the right captured “working class” discontent with Reagan, but it was already there in trade unionism voting with Nixon, etc. I don’t mean to say that the Tea Party represents working people’s interests – they most certainly do not. However, they do represent an ongoing narrative wherein working folks vote against there own interests because the “elites” (i.e. liberalism)are just exploiting them with taxes, supporting “special interests” that they are told conflict with their own. While the squabbling goes on between the wealthy and the super-wealthy the grass roots right exploits the opportunity of turning the traditional liberal base into a fifth column of sorts. Blue dogs are a good example. They claim they must be more conservative because their base is, and this may be true, but by rights the blue dogs should be republicans.
I’m giving myself a headache…
SomervilleTomsays
I’m sorry, but most of the “ideas” of the Tea Party fail even the most cursory examination.
Folks who still support the Tea Party must, by construction, willfully ignore facts and reality. Street-smart people with money and power have always been able to take money away from the ignorant — especially that segment of the ignorant who allow their emotions and superstitions to dominate their brains. Anybody with a room-temperature IQ who votes for a Tea Party candidate is simply not paying attention to reality.
I agree with you about the “blue dogs”.
whosmindingdemintsays
But it is their actual, physical presence on the political scene that I’m saying gives the right a reality they did not have before. Republicans on the street corner? Really?
Let’s face it there is a lot of ignorance out there. Along with a lot of fear.
Christophersays
…relative to what specific policies we are missing. Then you double-down by saying we don’t do grassroots. Where have you been? Every campaign I’ve been involved with has prioritized grassroots. The President himself has spoken directly about knocking doors, making calls, etc. Dean revitalized the party and while he was not my choice for nominee he was my choice for Chair. If anything I’ve seen imitations of his campaign reaching out online, evolved to accomodate new media. I’m really not sure what you are getting at, but please when you respond provide YOUR ideas, without links.
The only people who knock on doors for campaigns should be those who live in the neighborhoods that they canvass, or have some organic cultural tie to that neighborhood (ethnic commonality in isolation don’t cut it).
Phone banks, except from the abovementioned people should be avoided like the plague. In an age of caller IDs and prepaid cell phones (when people pay for incoming calls) they alienate far more people than they attract.
It never hurts to ask what people’s takes are on the issues, rather than presuming their interests.
It’s counterproductive to presume constituencies without fact checking on the ground; many organizations cannot deliver their own membership, much less do effective outreach.
Speaking as someone who was irritated by Howard Dean’s supporters in 2004 (and found the candidate to be self-righteous), I have to give him credit for recognizing and fixing the problem when he was the DNC head. Would that the Party had continued his work.
paulsimmonssays
Media, including social media, is a support mechanism.
These wars are won on the ground.
paulsimmonssays
…and primarily preach to the converted.
Republicans wage “combined arms” war, which is why they tend to be better at attracting blue-collar support.
As in the case of Scott Brown, they use progressives as their outreach mechanisms.
seascrapersays
If you go around to people’s houses, and hear them talk, and you want their votes, you tend to change your policies. That change doesn’t filter very high up among officeholders in the Democratic Party.
SomervilleTomsays
Most public opinion polls show that the policies of the Democratic party are supported by a majority of Americans.
The strategy of the GOP is to avoid that reality by tactics that include:
1) Using ruses like the “voterID” garbage to disenfranchise as much of the pro-Democratic party vote as possible
2) Use inflammatory rhetoric and “issues” to fire up the rabid-right, in hopes that the racists, xenophobes, sexists, and plain old ignoramuses who vote will outnumber their counterparts from the Democrats.
If there is any truth to your observation at all, it is that the Democratic Party should more aggressively fire up its more extremist base. Certainly the “ground game” is an important part of that, but I’m not sure that any of this is (a) needed and (b) what you had in mind.
The bottom line is that an election that is truly representative of the will of the American public will be won, easily, by the Democrats. The game, therefore, for the GOP is do whatever it takes to distort that representative outcome. The corresponding game for the Democratic Party is to block and/or balance the effort of the GOP to succeed at their distortions.
seascrapersays
Have you ever talked to a human being face to face? Nobody talks like that. Most of the Dems believe what you do. That’s why they lose.
SomervilleTomsays
I know who I talk to. I know what I say, I know what they say. I don’t know anything about who you talk to.
The people I talk to are appalled by the two aspects of the GOP I noted above. The Republicans I talk to are embarrassed and ashamed by high-profile efforts to revert to the worst practices of the Jim Crow era. In all the people I talk to — and there are many — I don’t know anybody who applauds the voter ID foolishness.
To the contrary, and perhaps in support of your point, the only places I hear these sentiments supported are:
1) Right-wing talk shows
2) Right-wing columnists like Howie Carr
3) Right-wing comments on news websites (I note that those comment sections are disappearing because so many of the “comments” violate terms of service that disallow racist and offensive material)
4) Right-wing commentary from folks like you on blogs like this
There is a reason why the Massachusetts Republican is an endangered species. You apparently think you somehow have the pulse of “the people”. My own experiences suggest that you are very mistaken in that perception.
kbuschsays
To a degree, a lot of Democratic policy relies on the belief that government can do some kinds of good. The public might agree with liberals on policies, goals, and even, to an extent, values. However, if distrust in anything involving government has been hammered into you since Reagan, then you might be open to the second best solutions Republicans claim to offer.
Dukakis and Patrick show a great affinity toward running government well and competently. That certainly enhances hope. Our state legislature, alas, all too often pulls things in the other direction. Similarly you might think that the filibuster in the Senate will hurt the Republicans, but it also proves their point: government doesn’t work. It hardly matters that they’re the ones that make it not work.
*
Canvassing back in 2007, I was surprised how many people were convinced (convinced!) that all sorts of government officials were on the take. As if we were ruled by an immense kleptocracy. If you had that belief, you’d be adverse to any increase in state revenue.
paulsimmonssays
… the single most important aspect of wining competitive elections, all things being equal; all other aspects (media in particular) augment the field.
Disconnected field ops can work to your adversary’s advantage.
In upballot races, field should be modular for the practical reason that locals organize their own neighborhoods, and provide accurate information from the ground; and the moral reason that bottom-up politics at its best are more accountable that the top-down cookie-cutter model prevalent in current Democratic campaigns.
Republicans tend to fight combined arms campaigns, whereas Democrats traditionally love air wars. Furthermore, Republican media (subordinate to Republican field) are very good at exploiting that vacuum: if all one hears in civic life are right-wing talking points, your spots get traction as a reinforcement mechanism of what is already believed.
Insofar as a truly representative election being “easily won” by the Democrats, I refer you to the trend line in Pollster. The same site’s electoral graphic gives Obama a current electoral vote advantage, but I learned a long time ago that complacency breeds defeat.
Paul, I read the previous comment to which you linked several times before writing my previous comment and I still can’t find, “I wish Democrats would support legislation to…”
As for tactics, most of the time when possible at least in my experience, callers and canvassers ARE local, but frankly, that shouldn’t matter. If someone calls or knocks on my door I don’t ask where they are from and I don’t care. There are some people from across the country I may identify with more than some of my own neighbors.
whosmindingdemintsays
People in houses, when they talk and you want their votes, don’t want helth insurance for their kids, do want war in Iraq, tax dollars to oil companies, and higher interest on student loans?
seascrapersays
Here’s what the Democrats say on health insurance, for instance:
“We have heard that insurance companies and doctors have a lot of extra money. So we will force companies and doctors to give health insurance to kids. This won’t affect the cost of health insurance, or the supply of doctors.”
petrsays
Here’s what the Democrats say on health insurance, for instance:
“We have heard that insurance companies and doctors have a lot of extra money. So we will force companies and doctors to give health insurance to kids. This won’t affect the cost of health insurance, or the supply of doctors.”
I’ve never heard anybody say anything remotely resembling what you assert. Not even close.
Democrats wonder why, in a free market, health insurance companies need to be legally forced to insure people….
kbuschsays
Democrats in cartoons?
whosmindingdemintsays
or am I just an idiot…
When I want to comment as a reply to a specific post, it is not allowed.
SomervilleTomsays
No, you are not an idiot. The IE browser is, in fact, totally hosed.
I’ve had no problem with Firefox, Chrome, Safari, and so on. If you’re using one of these browsers, and still having a problem, then perhaps the editors can help out.
had an interesting post up about a year or so ago on the upper reaches of the income bracket. Put these two points together:
1. We tend to evaluate our success and well-being comparatively.
2. The income curve near the top has a very steep slope.
Result: People who are doing quite, quite well are often comparing themselves to others who are doing a great deal better, and thus, they mistakenly think they’re not doing that well at all.
This may account for a lot of the feelings of victimization we keep hearing from the 1%.
For good or ill, politics have become increasingly Darwinistic over the past four decades. While income inequality is an issue in the abstract for most people, the majority nevertheless identifies more with the rich than the poor, and blames government as much as corporations for the current economic climate.
Furthermore, in the absence of grassroots-credible liberalism, corporate interests win by default, particularly on matters such as corporate tax breaks.
In Massachusetts, despite a brief period of discussing income inequality, the Commonwealth is back to status quo ante, with little in the way of practical policies addressing the issue, as I write this.
IMHO, this goes far to illustrate the credibility problems facing progressives; they’re simply not trusted in blue-collar communities, in the absence of tangible policies addressed to their specific needs.
Your first assumption is that politics has ‘devolved’ into something more “darwinistic” (whatever it is you think you mean by that…) when one only has to hark back to supporters of John Adams claiming Thomas Jefferson was the anti-christ to know that such an ideal past never obtained.
Your second, eminently more understandable, assumption is that most voters think like you. They do not. As a former member of the ‘blue collar communities’ I can attest that they do not have the luxury of voting on trust. Those who are fortunate enough to belong to a union (a dwindling population… hm?) are reliably Democratic because they know the Democrats are with them and the Republicans want to walk back big labor. Those not in a union are reliably hen-pecked (or in the parlance my father used ‘nickle-n-dimed’) to the extent that they live in a perpetual state of fear: constantly looking over their shoulder for the next indignity and constantly kept on edge by the bosses in order to prevent unionization; in effect, the bosses go out of their way, often, to make their lives much worse in order that unions don’t come in an make them a little better. Blue is a cruel collar.
are here . It would be helpful if they were broken down according to income range and other such stats to better analyze them, but I can see why paulsimmons might think this. Stats or no stats, you get this impression from talking to people. Recent reading on my Facebook page includes a rant from an averaged incomed person believing they were the 1% we speak of when talking about unfair taxation, and they believe they are the subject of our wish to increase their taxes. If only people would pay attention and learn what is really going on. I live in Scott Brown territory, and it can be like banging your head against the wall sometimes. But to expand on what paulsimmons is saying….. I really don’t have a whole heck of a lot to offer independents on how their lives have improved since 2008. Most of them had health insurance already, they’ve seen nothing but increases in the cost of living, friends and family losing jobs, Higher state and local taxes, and cuts to schools. If they happened to place faith in Barack Obama in 2008, I think it’s entirely possible they won’t do it again.
…that if wealth is already stratified, grading tax breaks in favor of the already wealthy would only exacerbate the inequality, even at the top. More from Ezra:
Check out the intervals
60-69
76-79
82-89
92-00
02-07
Don’t you find that strange? If I wanted to make the point Ezra is making and 70-75 had data which went contrary [along with 80-81, 90-91, etc], I’d drop those points. Maybe the data just wasn’t available, but still — you use the ‘X9 as anchors — ’69 becomes the beginning of the next set, ’79, etc.
Ezra got the chart from the Center on Budget and Policy Priorities, and it isn’t clear there what they were thinking.
They’re not excluding data, they’re looking at how income gains went to the top 1% during periods of economic expansion. 1960 to 1969 is a period of economic expansion; ’76 to ’79 is a period of economic expansion; ’82 to ’89, etc., etc. The only period they don’t include is Nov. 1970 through Sept. 1973 which I agree is a problem, but it’s not an issue of regular intervals.
… but I think ’82 was when Reagan slashed the top rate to something like 28%. ’92 was when Clinton brought it back up to the upper 30% and 2002 was the Bush tax cuts went into effect. Just from a statistical point of view it might make sense to do it in this manner simply to avoid discontinuities. I dunno… But I don’t think it strange.
This chart shows the emergence of “S” corp filings by individuals.
Prior to 1984 most small/mid size corporations were “C” corporations- in 1984 the law changed. S corporations file as individuals not corporations.
In a lot of cases “S” corps owners while seeming to make a lot of money don’t. A S corporation has a profitable year and reinvests this income in operations – the individuals who own this corporation will pay taxes on this investment by the corporation as it’s profit. The don’t get this money as a distribution.
I’ve operated one of those S-corporations.
I’m not sure how you conclude that when an S-Corp “reinvests this income in operations”, it isn’t tax deductible. I always found it fairly straight-forward: the advantage of incorporating a small business (in those days as a C- or S-Corp) was that every expenditure that could reasonably be associated with the business was then tax deductible. Each of the ways to “invest in operations” that I can think of — hire new employees, retain more third-party services, buy or lease more sales or production space — absolutely are tax deductible for an S-Corp. I therefore think you are mistaken in this matter.
Secondly, the change to encourage S-corporations greatly aided the owners. Personal income rates were (and are) significantly lower than corporate tax rates, and so this change amounted to a significant tax cut for those owners.
Thirdly, I don’t see what any of this has to do with the information presented in this thread. My admittedly cursory read of the various data sources (like the CBO) leads me to conclude that these data sources have already taken these factors into account.
Finally, the last chart from mr-lynne showing that the top 1% has taken nearly all of the income gains from 2002-2007 is “the bottom line” — after all the hand-waving and obfuscation, the top 1% pocketed 65% of the income gain.
This law shows the intense and rapid concentration of wealth by the top 1%. The tax law changes — including the creation of S-corps — certainly helped accelerate that concentration. I’m not sure that’s the point you were making, though.
Ranges from 7 years to 39 years.
http://en.wikipedia.org/wiki/MACRS
If you purchase a building you expense it over 39 years – if you purchase new HVAC equipment you expense it over39 years.
If you buy new equipment for your restaurant you expense it over 15years.
S corp expenses are not different than C corp
You’re ignoring the Chapter 179 deductions that go a long way towards expensing that restaurant equipment (not to mention computers and such). The truth is that the government has already bent over backwards to help true small businesses.
As you observe, these are all the same for S-corp and C-corp entities.
On the other hand, C-corps are much better able to carry losses forward (at least they were when I last looked). So the rule-of-thumb for developing and emerging businesses was to organize as a C-corp during the launch years, so that operating losses were more fully protected, and then move those assets over to a companion S-Corp as they become profitable — taking advantage of the significantly lower tax rates available to S-Corps.
The bottom line remains that the tax law changes that created the S-Corp are extraordinarily beneficial to the owners of those S-Corps.
Your claim that S- versus C-corp somehow explains away the extreme wealth concentration of recent years is, in my view, incorrect.
The way you described the tax consequences of investing for S corps is completely, 100% wrong. I know – I’ve been running my own S corp for the last 10+ years. You haven’t got the first clue of what you’re talking about.
Precisely
You’ve complained often that progressives don’t advocate for blue collar workers, but I think I speak for many progressives and I say that leaves me scratching my head, because from where I sit, our policies DO benefit blue-collar workers. WE are the ones constantly fighting for working people whereas God knows the other side certainly isn’t. What things would like us to advocate that you don’t think we are addressing? What do we do to make working people not trust us, in your opinion?
2008 was a vote against George W. Bush. Obama won, Hillary would have won…I think Richardson and Edwards would have had a fair shot depending on scandal level at the time. Part of that dislike was rooted in disastrous managing of the economy, but how deep could it have been if millions turned around and voters for those policies’ apologists two years later?
I think that this is just so. It has been a great many years since there was a national election that was clearly “for” a party rather than merely “against” the other. 1994 was a reaction to Democratic corruption and ineffectiveness, and came closest of the recent elections to acheiving a “mandate” for the victors. But it didn’t and the Contract With America “mandate” fizzled quickly. Since then, we have had a series of negative-reaction elections, in which one side wins by virtue of being not the other. 1998. 2000. 2006. 2008. 2010.
Which gives us all whiplash, tends to reinforce the trend of power to the wings of the parties, and is damaging to the polity IMO.
The Tea Party, for lack of a better phrase, capitalized on populist discontent among working people. They have successfully gotten the working class to vote against its own interests in a couple of ways:
The upward mobility narrative has been deformed into a wannabe riff – people aspire to what they wish to become with no recognition of where they are. There is no serious discussion of working class values in this country because it is now undesirable to be working class. The working class in America is seen as the underclass. Liberals have exaserbated this, particularly of late, by framing every issue as a need to protect the “middle-class.” Its a little nauseating to here them from time to time choke on the the word class if it is preceded the wod work – thus working families is ok, or low-to-middle income, but adding the word class is a third rail. The number of poor people is rising at an alarming rate and liberals seem more interested in saving amiddle class that is perpetually falling behind, under or through the cracks. I pick on liberals because the motives of the right are indisputable.
It is a fundamental lack of honesty. That element of Occupy that is helping people stay in their homes gets it. They may or may not call themselves progressives, but they do not shrink from the attacks by the right. Its been years and there is no coherent public policy to keeproofs over that growing segment of the “middle-clas” that are a day away from iving on the street. Its no joke. Stop singing a siren song to an idealized image of the middle class and focus on the real problems. This will require acknowledgement of the working class.
… that they capitalized on populist discontent, it should be noted that the particular discontent was not ‘new’ and rather tea party issues look an awfully lot like regular GOP issues, which become issues of discontent whenever a Democrat wins anything. If there were ‘working class’ issues in the tea party, they were almost instantly hijacked.
I highly recommend “The Strange Death of Liberal England, 1910-1914” by George Dangerfield. The entire edifice of Liberalism from Gladstone to WW1 collapsed allowing Labor, trade unions and the welfare state to set the tone through to Thatcher. What is happening today is just the opposite: failing liberalism is allowing the extreme right to fill the vacuum.
That’s my 2 cents.
I don’t disagree much here. I do think, however, its important to recognize exactly how it is that liberalism is failing. Liberalism is failing because the right recognized something about our system of government that the left is proving slow to learn. Our system is great at stopping policy from being enacted, causing two things – 1) liberals have problems passing even popular legislation and 2) the left has been fooled into thinking they can overcome this by making sure to tack right. Both of these phenomena conspire to make sure that liberal policies in general aren’t enacted – and as such, these ‘phantom’ policies can’t be said to have ‘failed’.
Rather than 2008 , I think that the 2006 cycle is a better example. To his credit, Howard Dean learned from his 2004 candidacy – that disconnected progressive activists repel far more voters than they attract – and committed the Democratic Party to a “Fifty State” program, premised upon creating a bottom-up, grassroots accountable political structure. The 2006 payoff from Dean’s efforts led to Democratic gains across the board, and created the circumstances that led to the Obama victory in 2008.
Unfortunately, in 2009, President Obama abandoned the model and purged Dean from the Democraic National Committee. The result was a return to the decades-old Democratic tradition of abandoning the grass roots after elections. The Republicans took advantage of this lack of credibility and warm bodies to fill the resulting vacuum in 2010.
They do so today
This explains the political traction of Mitt Romney, and locally, Scott Brown. In the absence of credible and organized neighbor-to-neighbor field work, Republicans win by default, because outside progressives cannot and do not relate to local nuances and local experiences.
I devoutly hope that the President and his top aides rectify this in the 2012 cycle, but he will face a lot of resistance within the Party structure; the so-called grassroots efforts funded by George Soros will do nothing but reinforce Republicans on the ground.
In the absence of a permanent structure embedded in local civic culture, run by and on behalf of local commmunities it is not difficult for the Right to organize those who rightfully feel abandoned. To the degree that Democrats presume the support of those they have abandoned, they deserve what they get.
…and, for what it’s worth, over a two-year election cycle, it costs a lot less to generate and expand locally-accountable political organizations than it does to start from scratch with the money-driven campaigns the way we do now.
I’m not following your logic here.
Specifically (emphasis mine):
Are you seriously claiming that people who supported Barack Obama in 2008 are now supporting Mitt Romney because they “rightfully feel abandoned”? Like whom? Over what issues?
I don’t mean to sound argumentative, I just can’t make ANY sense of this. Are you really saying that idealistic Democrats who are disappointed that GITMO is still open or that the war criminals of the prior administration were not prosecuted are going to support Mitt Romney and Scott Brown????
I don’t think so.
All Politics is Local: More than twenty years ago, William Grieder described how the Democratic Party abandoned grassroots field organizing, in favor of media campaigning. Exclusive of Dean’s efforts (since dismantled) there has been no change.
It’s the [Local] Economy: To the degree that progressive concern for working-class Americans is primarily rhetorical; and too many progressives first and foremost identify more with Richard Florida than Walter Reuther, Democrats operate as rightwing outreach mechanisms. The presumption that self-entitled elitists are owed working-class support beggars the imagination.
“Idealistic Democrats who are disappointed that GITMO is still open or that the war criminals of the prior administration were not prosecuted” are, at best a miniscule portion of the people within the cohorts I described, and to his credit, Obama is not going to waste sleep worrying about Code Pink.
In any case, it’s irrelevant to my point: Politics at its base is profoundly personal and emotional; and the irony of modern technology and social media is that we’ve returned to pre-radio days where the most effective tool is personal contact by people with an organic connection to voters. Social media is a great communication augmentation device, but it doesn’t replace warm bodies who know the local nuances. Absent such contact, it’s dangerous to presume support.
This is particularly true when Republicans are exploiting the vacuum on the ground, by organizing through existing institutions, and using populist anti-progressive sentiment as an organizing tool.
The issue is not ideological but political competence; at a time when the economic recovery is skewed towards upper and upper-middle income groups, others are subject to exploitation (as in union support for casino gambling in Massachusetts in the context of 40%+ unemployment in the trades).
It simply happens that the Right invested in grassroots infrastructure.
One does not have to agree with an adversary to understand his tactics (or one’s own side’s objective liabilities).
Your two links above don’t provide actual data that young activists from Park Slope wearing bright orange baseball caps were the reason Iowans didn’t warm up to Howard Dean. And yes, yes, the harassment by phone, cell phone, mail, email, and doorbell that has become the modern Democratic Party version of a political campaign seems risky to me, too.
But is it? I don’t know.
And people whose day jobs consist of trying to win elections don’t seem worried.
Data anyone?
…was to self-entitled out-of state activists operating on Dean’s behalf who alienated locals in Iowa. A dynamic, I might add, that Dean corrected during his DNC tenure.
It was cultural snark, not meant specifically to yuppified Brooklyn, by the author of the linked post.
But I have no idea whether you are right or wrong. You’ve found someone who agrees with you. That’s comforting, but it still falls short of convincing evidence.
I would say the right captured “working class” discontent with Reagan, but it was already there in trade unionism voting with Nixon, etc. I don’t mean to say that the Tea Party represents working people’s interests – they most certainly do not. However, they do represent an ongoing narrative wherein working folks vote against there own interests because the “elites” (i.e. liberalism)are just exploiting them with taxes, supporting “special interests” that they are told conflict with their own. While the squabbling goes on between the wealthy and the super-wealthy the grass roots right exploits the opportunity of turning the traditional liberal base into a fifth column of sorts. Blue dogs are a good example. They claim they must be more conservative because their base is, and this may be true, but by rights the blue dogs should be republicans.
I’m giving myself a headache…
I’m sorry, but most of the “ideas” of the Tea Party fail even the most cursory examination.
Folks who still support the Tea Party must, by construction, willfully ignore facts and reality. Street-smart people with money and power have always been able to take money away from the ignorant — especially that segment of the ignorant who allow their emotions and superstitions to dominate their brains. Anybody with a room-temperature IQ who votes for a Tea Party candidate is simply not paying attention to reality.
I agree with you about the “blue dogs”.
But it is their actual, physical presence on the political scene that I’m saying gives the right a reality they did not have before. Republicans on the street corner? Really?
Let’s face it there is a lot of ignorance out there. Along with a lot of fear.
…relative to what specific policies we are missing. Then you double-down by saying we don’t do grassroots. Where have you been? Every campaign I’ve been involved with has prioritized grassroots. The President himself has spoken directly about knocking doors, making calls, etc. Dean revitalized the party and while he was not my choice for nominee he was my choice for Chair. If anything I’ve seen imitations of his campaign reaching out online, evolved to accomodate new media. I’m really not sure what you are getting at, but please when you respond provide YOUR ideas, without links.
Here.
Some suggestions:
The only people who knock on doors for campaigns should be those who live in the neighborhoods that they canvass, or have some organic cultural tie to that neighborhood (ethnic commonality in isolation don’t cut it).
Phone banks, except from the abovementioned people should be avoided like the plague. In an age of caller IDs and prepaid cell phones (when people pay for incoming calls) they alienate far more people than they attract.
It never hurts to ask what people’s takes are on the issues, rather than presuming their interests.
It’s counterproductive to presume constituencies without fact checking on the ground; many organizations cannot deliver their own membership, much less do effective outreach.
Speaking as someone who was irritated by Howard Dean’s supporters in 2004 (and found the candidate to be self-righteous), I have to give him credit for recognizing and fixing the problem when he was the DNC head. Would that the Party had continued his work.
Media, including social media, is a support mechanism.
These wars are won on the ground.
…and primarily preach to the converted.
Republicans wage “combined arms” war, which is why they tend to be better at attracting blue-collar support.
As in the case of Scott Brown, they use progressives as their outreach mechanisms.
If you go around to people’s houses, and hear them talk, and you want their votes, you tend to change your policies. That change doesn’t filter very high up among officeholders in the Democratic Party.
Most public opinion polls show that the policies of the Democratic party are supported by a majority of Americans.
The strategy of the GOP is to avoid that reality by tactics that include:
1) Using ruses like the “voterID” garbage to disenfranchise as much of the pro-Democratic party vote as possible
2) Use inflammatory rhetoric and “issues” to fire up the rabid-right, in hopes that the racists, xenophobes, sexists, and plain old ignoramuses who vote will outnumber their counterparts from the Democrats.
If there is any truth to your observation at all, it is that the Democratic Party should more aggressively fire up its more extremist base. Certainly the “ground game” is an important part of that, but I’m not sure that any of this is (a) needed and (b) what you had in mind.
The bottom line is that an election that is truly representative of the will of the American public will be won, easily, by the Democrats. The game, therefore, for the GOP is do whatever it takes to distort that representative outcome. The corresponding game for the Democratic Party is to block and/or balance the effort of the GOP to succeed at their distortions.
Have you ever talked to a human being face to face? Nobody talks like that. Most of the Dems believe what you do. That’s why they lose.
I know who I talk to. I know what I say, I know what they say. I don’t know anything about who you talk to.
The people I talk to are appalled by the two aspects of the GOP I noted above. The Republicans I talk to are embarrassed and ashamed by high-profile efforts to revert to the worst practices of the Jim Crow era. In all the people I talk to — and there are many — I don’t know anybody who applauds the voter ID foolishness.
To the contrary, and perhaps in support of your point, the only places I hear these sentiments supported are:
1) Right-wing talk shows
2) Right-wing columnists like Howie Carr
3) Right-wing comments on news websites (I note that those comment sections are disappearing because so many of the “comments” violate terms of service that disallow racist and offensive material)
4) Right-wing commentary from folks like you on blogs like this
There is a reason why the Massachusetts Republican is an endangered species. You apparently think you somehow have the pulse of “the people”. My own experiences suggest that you are very mistaken in that perception.
To a degree, a lot of Democratic policy relies on the belief that government can do some kinds of good. The public might agree with liberals on policies, goals, and even, to an extent, values. However, if distrust in anything involving government has been hammered into you since Reagan, then you might be open to the second best solutions Republicans claim to offer.
Dukakis and Patrick show a great affinity toward running government well and competently. That certainly enhances hope. Our state legislature, alas, all too often pulls things in the other direction. Similarly you might think that the filibuster in the Senate will hurt the Republicans, but it also proves their point: government doesn’t work. It hardly matters that they’re the ones that make it not work.
*
Canvassing back in 2007, I was surprised how many people were convinced (convinced!) that all sorts of government officials were on the take. As if we were ruled by an immense kleptocracy. If you had that belief, you’d be adverse to any increase in state revenue.
… the single most important aspect of wining competitive elections, all things being equal; all other aspects (media in particular) augment the field.
Disconnected field ops can work to your adversary’s advantage.
In upballot races, field should be modular for the practical reason that locals organize their own neighborhoods, and provide accurate information from the ground; and the moral reason that bottom-up politics at its best are more accountable that the top-down cookie-cutter model prevalent in current Democratic campaigns.
Republicans tend to fight combined arms campaigns, whereas Democrats traditionally love air wars. Furthermore, Republican media (subordinate to Republican field) are very good at exploiting that vacuum: if all one hears in civic life are right-wing talking points, your spots get traction as a reinforcement mechanism of what is already believed.
Insofar as a truly representative election being “easily won” by the Democrats, I refer you to the trend line in Pollster. The same site’s electoral graphic gives Obama a current electoral vote advantage, but I learned a long time ago that complacency breeds defeat.
Case in Point: the Scott Walker has a comfortable lead in the Wisconsin recall election, and the locals feel abandoned by the DNC.
Deja vu, all over again.
Paul, I read the previous comment to which you linked several times before writing my previous comment and I still can’t find, “I wish Democrats would support legislation to…”
As for tactics, most of the time when possible at least in my experience, callers and canvassers ARE local, but frankly, that shouldn’t matter. If someone calls or knocks on my door I don’t ask where they are from and I don’t care. There are some people from across the country I may identify with more than some of my own neighbors.
People in houses, when they talk and you want their votes, don’t want helth insurance for their kids, do want war in Iraq, tax dollars to oil companies, and higher interest on student loans?
Here’s what the Democrats say on health insurance, for instance:
“We have heard that insurance companies and doctors have a lot of extra money. So we will force companies and doctors to give health insurance to kids. This won’t affect the cost of health insurance, or the supply of doctors.”
I’ve never heard anybody say anything remotely resembling what you assert. Not even close.
Democrats wonder why, in a free market, health insurance companies need to be legally forced to insure people….
Democrats in cartoons?
or am I just an idiot…
When I want to comment as a reply to a specific post, it is not allowed.
No, you are not an idiot. The IE browser is, in fact, totally hosed.
I’ve had no problem with Firefox, Chrome, Safari, and so on. If you’re using one of these browsers, and still having a problem, then perhaps the editors can help out.
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