bank secrets

[eppie]

From all you say it seems more that you are against bad spending nof taxes. If a state uses its taxes wisely much of the taxes come back to you. Maybe that is why in the US your net payment of taxes might indeed be even higher than eg here in sweden.

Anyway, again, the topic of this thread (come down on property tax evasion) must get your agreement?
This is not a tax that hardworking middleclass are paying.

[--Pete]

Hi,

If a state uses its taxes wisely much of the taxes come back to you.

That is socialist thinking. Consider:
I want food. I go to the grocery store and get it. If I pay the grocer directly, I only need to pay enough to cover his cost, expense, and salary. If I pay through the state, I pay all that, plus the salary of the tax collectors, their bureaucracies, the dispensers of funds, their bureaucracies, etc. Not to mention killing a forest for the wood for the paper for the paperwork. So, I pay much more in taxes than I would in cash to get the same groceries. You can look at it from the standpoint that the groceries are what I get back for my taxes. Or you can look at it from the standpoint that the higher overall price is what I get to support government. Either way, I get to eat less. And my money is wasted.

And that is assuming the government is willing to stop at taxing me to pay the grocer. But we know it would not stop there. Since the government is "paying" (not really, I'm paying, but they're middleman-ing) it will impose it's regulations on the grocer. No more than so much for beef -- which means no prime, no better cuts. Those will either go to a black market or completely disappear when the ranchers cannot get enough for their cattle to make keeping good stock worthwhile.

The whole concept of "a state uses its taxes wisely" is so ludicrous as to make me cry. That any intelligent adult anywhere could actually say this except in sarcasm is a great tribute to the propaganda machine of the far left (and, yes, the far right has its own, possibly even more evil, propaganda machine). Socialism is the prime example of the road to hell being paved with good intentions.

On the other hand, if instead of wanting food, I wanted a war, then government spending is surely the way to go.

Anyway, again, the topic of this thread (come down on property tax evasion) must get your agreement?

I think we've got a cultural or language barrier here. In the USA, 'property tax' is used almost exclusively for the taxes paid on real estate, primarily that used for domestic dwellings. Since we do not pay taxes on our other property (bank accounts, jewelry, stocks, Krugerrands, plate and silver, or fine linen), property tax is not an issue. The hiding of income in overseas bank accounts to avoid paying (in some cases duplicated) income tax is.

--Pete

[kandrathe]

From all you say it seems more that you are against bad spending nof taxes. If a state uses its taxes wisely much of the taxes come back to you. Maybe that is why in the US your net payment of taxes might indeed be even higher than eg here in sweden.

Anyway, again, the topic of this thread (come down on property tax evasion) must get your agreement?
This is not a tax that hardworking middleclass are paying.

How do you deposit property in UBS? We are talking about income that is earned outside the USA, and deposited in Swiss Banks.

[kandrathe]

But we are talking about swiss bank accounts so income tax is not the issue here. I think people taking out bigger loans than they could cope with together with bankers prevent people from becoming wealthy. Anyway, I don't think a too low amount of wealthy people is the biggest problem of the US.

What do you think people deposit in Swiss banks? Chocolate?

We have been discussing this more often but generally the countries with the biggest tax burden are the richest and most developed (except of course for Switzerland, but we know where they get their money from). On a structural basis it is impossible to 'run' a state with little or no taxing. It can go fine for a country that is just founded and that has an incredibly huge piece of land for the taking with all its natural riches, or for the old colonial power that just got all there riches using slavery and stealing from other countries...but for the rest impossible.

I'm not advocating zero, just reasonable (like <10% of GDP,or no more than $1 trillion). The fundamental question still remains; "What is the purpose of the Federal government?" I believe that is defined in the Constitution. Everything else is a burden that should be resolved at the State level.

The imports and exports from the US amount to many (like 20) trillions of dollars, yet we tax them very little in the name of "free" trade. Foremost, the US federal government needs to go on a diet and lose about $1.5 trillion. This means that States will need to step up and provide social services, if they want them. This is a much fairer way of handling taxation. Regional issues will remain a local funding issue.

[ShadowHM]

Hi,
That is socialist thinking. Consider:
I want food. I go to the grocery store and get it. If I pay the grocer directly, I only need to pay enough to cover his cost, expense, and salary. If I pay through the state, I pay all that, plus the salary of the tax collectors, their bureaucracies, the dispensers of funds, their bureaucracies, etc. Not to mention killing a forest for the wood for the paper for the paperwork. So, I pay much more in taxes than I would in cash to get the same groceries. You can look at it from the standpoint that the groceries are what I get back for my taxes. Or you can look at it from the standpoint that the higher overall price is what I get to support government. Either way, I get to eat less. And my money is wasted.

That was a bit of a leap from eppie's statement. Consider:
I want food. I go to the grocery store and get it. I don't pay directly for the roads that the food travelled to get to me. I don't pay directly for the oversight of the factories that (usually) ensures that the products that I purchase are safe for human consumption. Nor do I pay directly for the truth in advertising oversight that keeps the labels honest. I subsidized the gasoline costs of the farmer and I also subsidized the property taxes on the land it was grown on. But I still pay the grocer directly for the food. I do look at it from the standpoint that quite a lot of my subsidies are, indeed, 'coming right back at me'. My money was not wasted. I got to avoid both sickness and additional costs in my grocery bill.

I just have to jump in now and again to debunk that Yankee knee-jerk 'socialism is state ownership and always a Bad Thing™' reaction. ;)

Please do continue the regular rant about the lack of efficiency in government spending. I would not disagree on that front. I just wanted to register my objection to the mis-use of the one word.

[Jester]

But, they didn't earn it in wages. My point is that the money grab by the US federal government is against people who earn money through wages. If you earn a salary of $100,000, you would be lucky to be able to save/invest $1M over 20 years. With some incredible investments and luck, you might multiply that by 10. The fact remains that the government feeds itself on the backs of wage earners (78% of revenue).

They certainly do, and I think any tax that has traction on the growth of wealth, rather than income, is on the right track. Death taxes are a start.

Investing $4000 per year is not the road to Billions. Look up the average US rate for savings and investment, and you will see that it has been in the negative numbers for years. Lately, this has been caused by the ridiculously high prices of homes (which are now upside down for many, many people).

First, there is no "road" to billions, in the sense that it is well understood and can be followed. There's a reason why only a tiny handful of people have that much money; it's very, very, very difficult to get it. Nearly every American billionaire on that list is there for one reason: they own tons of stock in a gigantic, successful corporation. In most cases, this is because they founded it. Warren Buffett is there because he some magical combination of the world's smartest and luckiest investor.

What is clear, however, is that, if there is a road to billions, however winding, it passes through America much more often than it does other countries, your protestations to the contrary notwithstanding. Bill Gates is the richest man in the world, and he earned the vast majority of it in the good 'ol USA, taxes and all.

Second, the average savings rate is negative because of simple preferences. If house prices are high, people have choices (I love the free market, don't you?): They can buy overpriced homes, or buy smaller homes, or rent. Americans chose to buy the homes, and go into debt, because the economy was supposedly going to prosper forever. Had they different preferences, as prevail in many Asian countries, they'd have saved their money rather than spent it. But, short of coercion, I don't know how to increase the marginal propensity to save except by increasing interest rates, but that would be economic suicide right now.

However that's just behaviour on average; it has nothing to do with any individual person, who is as capable of making their fortune with hard work, lots of savings, good luck and smart investment. A 35% tax rate will hardly prevent that from happening. Many of the current billionaires earned the bulk of their wealth when top rates were much higher than today. The trick, then as now, is to invest, either in your good idea, or someone else's. Nobody has ever earned their gigantic fortune on wages alone; either you make your money work for you, or you cap your earnings capacity at a few hundred thousand a year. That's always been true, and it would be every bit as true if they abolished the income tax entirely.

In 2003, any income over $57,500 was enough to qualify for the top tax rate.

Just the US federal tax for single people in 2008,
# 10% on income between $0 and $8,025
# 15% on the income between $8,025 and $32,550; plus $802.50
# 25% on the income between $32,550 and $78,850; plus $4,481.25
# 28% on the income between $78,850 and $164,550; plus $16,056.25
# 33% on the income between $164,550 and $357,700; plus $40,052.25
# 35% on the income over $357,700; plus $103,791.75

Am I missing something? How can you qualify for the top bracket at both $57,500 and at $357,700? Or did they change the brackets dramatically between 2003 and 2008? These rates sound quite reasonable to me, given what prevails in other OECD countries, not to mention the staggering quantity of the debt. Certainly, losing 35 cents to the dollar wouldn't be enough to stop me from earning more if I could.

In my opinion, 94 percent is pretty close to 99.5 percent.

From a marginal perspective, the difference between keeping one dollar in twenty and keeping one dollar in two hundred is quite substantial.

However, on the basic fact, you are correct, I was not. The 79% rate was a peacetime rate. Given the outlays required for the war, and the debts the government had to take on, I don't see even 94% as unreasonable. However, we are talking about the top marginal rate here, and not the rate paid by over 99% of the population. FDR's top tax rates were those paid by the tiny handful of the extremely rich, and were mostly cosmetic, to show that the richest were paying for their share of the war. The actual revenues raised from these supertaxes, as with most modifications to the top marginal rates, were fairly small.

-Jester

[Jester]

I´m not doubting the claim. Can you show me an article/webpage about both the 99.5% line and the tax which applied only to Rockefeller. My google-chi is weak.

Well, nobody has ever claimed that the 99.5% rate was put into place, only that FDR once mentioned it, although right-wing commentary often brings it up as a handy anecdote for demonstrating that FDR was the devil.

The %79 percent tax rate can be seen on the Wikipedia page, or on the page from the treasury dept. that Kandrathe linked to. I first heard the point about Rockefeller in "The Undercover Economist", by Tim Harford. It can also be found here.

-Jester

[--Pete]

Hi,

I don't pay directly for the roads that the food travelled to get to me.

But I don't have to pay for them in taxes, either. Many roads were, historically, built by private organizations for profit. With modern technology, it would be possible to charge users by the ton-mile and the only impact would be in a monthly statement. However, either way, the transportation cost, etc., would be part of the grocer's expenses (albeit, indirect).

I don't pay directly for the oversight of the factories that (usually) ensures that the products that I purchase are safe for human consumption. Nor do I pay directly for the truth in advertising oversight that keeps the labels honest.

I wouldn't buy an appliance without the UL tag, though I suspect I could. I think that they do a much better job of it than the governmental agencies that are forever recalling contaminated food and lead containing products. Some degree of governmental <strike>interference</strike> control is necessary to keep everyone honest, but I tremble at the thought of letting the government do it all. Besides, this is again part of the grocer's expenses.

I subsidized the gasoline costs of the farmer and I also subsidized the property taxes on the land it was grown on.

And that is a damned shame. The need for farm subsidies is far passed (if it indeed ever existed). That it ever accomplished much more than the dumping of excess milk and the spoilage of excess grain is something I've never had demonstrated.

Then again, I might be mistaken. If you intend 'subsidized' to mean 'pay for', then it is just another of the grocer's costs.

But I still pay the grocer directly for the food. I do look at it from the standpoint that quite a lot of my subsidies are, indeed, 'coming right back at me'. My money was not wasted. I got to avoid both sickness and additional costs in my grocery bill.

OK, I'm sorta lost. There are costs involved in generating the food that comes to market. Some of those costs come from the private sector (seed, fertilizer, gasoline, the farmer's living expenses, etc.). Some of them come from the government (inspection requirements, regulations as to wholesomeness, etc.). And some can come from either (transportation, the actual inspection, etc.).

In any case, these costs are the same whether I pay for the food directly or if the government pays for it for me using my taxes. My point was that if groceries were socialized, there would be additional costs, even in a perfectly efficient government. There would, at the very least, be additional people involved and their time would have to be compensated. But, their involvement does not contribute to the quality of the food, to the quantity, or to its availability in any positive way. The very best case scenario is that all they do is add a useless expense. One need only to look at the situation in the Soviet Block countries prior to the '90s to see what the real scenario is. The worse case scenario is what dark sf is made of.

I just have to jump in now and again to debunk that Yankee knee-jerk 'socialism is state ownership and always a Bad Thing™' reaction. ;)

I'm not convinced that "'socialism is . . . always a Bad Thing™" is that far off the mark. It definitely needs to be a last resort remedy, applied as lightly as possible. As to it being state ownership, that is a difficult concept. If I own a widget, but the state puts a limit on how I can use it, when I can sell it, to whom, and for how much, do *I* really own it? So, that grocer may own his store, own the products, but at what point of state regulation does that 'ownership' become meaningless?

Please do continue the regular rant about the lack of efficiency in government spending.

Your wish . . . B)

As if anyone could stop my ranting :lol:

--Pete

[Zyn]

eeeeeeeeeeeeeeeee

With all the irony I can muster, I like this guys comments more than I liked that other person who kept asking us to reorganize our forums.

Sorry to derail....nah, no Im not.

-Z

[kandrathe]

I'm not convinced that "'socialism is . . . always a Bad Thing™" is that far off the mark. It definitely needs to be a last resort remedy, applied as lightly as possible. As to it being state ownership, that is a difficult concept. If I own a widget, but the state puts a limit on how I can use it, when I can sell it, to whom, and for how much, do *I* really own it? So, that grocer may own his store, own the products, but at what point of state regulation does that 'ownership' become meaningless?

Would it not work to just have the government certify and license the private food inspectors? Just like how CPA's get to help us with our taxes, a lax inspection results in the loss of a license. There would still be some administrative over head, but nothing like the FDA. The government can act as the law maker, and regulator without supplying all the bodies to do the work.

[kandrathe]

The 79% rate was a peacetime rate.

Well, actually, in 1945 the top rate dropped to 91% until 1964. "In 1964 the top rate was decreased to 70% (1964 Revenue Act), then to 50% in 1981 (Economic Recovery Tax Act or ERTA). "

Then it went to 28% for 4 years, until the 1990's when it went up to 39.6% until 2001, when it dropped to 35%.

As a wage earner in order to get wealthy, you either need to be innovative, or earn well above the average wage earner and make sound investments. In my view, the system is designed to keep wage earners poor. Big business likes having lots of poor competitive wage earners to keep wages low. If everyone were able to become wealthy, then we'd have to open the borders and let in more poor wage earners.

[--Pete]

Hi,

Would it not work to just have the government certify and license the private food inspectors?

I don't see why not. OTOH, when I lived in Georgia, we had motor vehicle inspections (annually I think). The inspections were performed at state licensed gas stations and garages. It didn't take long to degenerate into a farce. Walk in, ask for 'inspection', pay $10 (or whatever), get sticker, leave. Often, the 'inspector' didn't even bother to look at the car (or even leave his booth). Here in Washington, we have emission test every other year. The test is conducted at a state owned facility by state employees. The tests are, in my experience, well run, relatively accurate, and through. State 1, free enterprise 0.

My guess is that the state employees have nothing to gain by skipping the test. They get paid by the hour, not by the test; they're gonna be there all day anyway. If they fudge the test and get caught, it's probably their job at risk. The 'private' inspectors take a chunk out of the inspection fee. The faster they do the inspection, the more they make. The fastest way to do the job is to do no job at all. And since it represents a small (but easy) bit of income, it is no big deal if they lose their license.

That's the rub with government systems and economic theories. They work very well on paper, but not nearly as well with people. If Everyman was Jefferson, we'd need no government at all. But, as Hamilton saw all too clearly (maybe because he actually spent some time in the trenches) most men are not Jefferson.

There would still be some administrative over head, but nothing like the FDA. The government can act as the law maker, and regulator without supplying all the bodies to do the work.

Maybe, maybe not. I wonder how many inspectors it would have taken to fix Georgia's auto inspection fiasco (they finally just gave up and dropped it, IIRC).

Not that I disagree with you. But I think that it isn't all as black and white as you sometimes present it. As always, the devil is in the details.

--Pete

[--Pete]

Hi

. . . keep wage earners poor. . . . able to become wealthy, . . .

I got to thinking about what you've been saying in this thread, and I realized that a lot of my disagreement is because what I mean by 'poor' and 'wealthy' does not seem to agree with what you mean.

To me, poor means not having the basic necessities. To be specific, lacking adequate food, clothing, shelter.

Wealthy to me means a good home, a reasonable quantity of clothing, a car for each driver in the family, ditto cell phones, cable TV, vacation time and money to go, the possibility of retiring early enough to enjoy it, decent health care coverage, an occasional meal out. And if you don't think this is wealth, ask the bulk of the six billion people alive today.

Between the poor and the wealthy used to be the middle class. But so many now define 'poor' as not owning a Ferrari, that you have to be a millionaire to be considered middle class.

I think that until we can agree on where we draw the status lines, this discussion is, at best, ambiguous if not meaningless.

--Pete

[eppie]

I think we've got a cultural or language barrier here. In the USA, 'property tax' is used almost exclusively for the taxes paid on real estate, primarily that used for domestic dwellings. Since we do not pay taxes on our other property (bank accounts, jewelry, stocks, Krugerrands, plate and silver, or fine linen), property tax is not an issue. The hiding of income in overseas bank accounts to avoid paying (in some cases duplicated) income tax is.

--Pete

Thanks for elaborating.

Over here we pay taxes over money we have sitting on our bank accounts or money we have invested in companies in the form of shares.

Nobody has his legal income transferred on swiss bank accounts. You put money on a swiss bank account after you have earned it (income) and payed income tax over it (or if it is money that was earned in an illegal way).

You put money in a swiss bank account if you are playing around with having your own business or other peoples businesses (buy out) and are scared they might go bankrupt. If you donät have any money in your country you can't pay, you file for bankruptcy and you start over again.

Normal income would also be taxed when you receive it in Switzerland, but it is logical a state wants you to pay taxes in your own country and not in another. If however you do business in switzerland and work for a swiss company and live there, well of course you will have a swiss bank account.


And as a reply to you grocery example; I think shadow summed it up nicely. Plus of course the fact that the only way a person can make a nice profit in a legal and sustaianble way is in a country that has a good financial and security structure....so taxes are necesarry for that. Kandrathes utopic society in which everybody pays for their own part of the army, firebrigade, schools etc. is far less likely to work than a socialist in which taxes are spend wisely.


Plus of course the fact that capitalism works in a way that needs more and more spending, for this you need more and more people with an income....all those tax inspectors do spend most of their money in their own country (and pay taxes themselves).


But just to make things clear; I agree 100% that in many cases taxes are spend in a stupid way. But my ideas are to change this through politics instead of just quite paying taxes.

[eppie]

Hi,
But I don't have to pay for them in taxes, either. Many roads were, historically, built by private organizations for profit. With modern technology, it would be possible to charge users by the ton-mile and the only impact would be in a monthly statement.
--Pete

That doesn't seem more efficient than just having taxes. You will always have people that pay a bit more or less and get bakc a bit more or less (by usage), still the work it would take to have every infrastructural change paid for with private funds would be thousands of times bigger than having the federal state use it's tax revenue.

I mean, eg the Hoover dam.....such a thing would never ever be possible when made using private funds. Of course only when you would have these huge mega companies......but I think we agree that those would be just as bad or worse than the federal state.

[Jester]

Well, actually, in 1945 the top rate dropped to 91% until 1964. "In 1964 the top rate was decreased to 70% (1964 Revenue Act), then to 50% in 1981 (Economic Recovery Tax Act or ERTA). "

Then it went to 28% for 4 years, until the 1990's when it went up to 39.6% until 2001, when it dropped to 35%.

That appears to be correct. My statement that 79% was a peacetime rate was in reference to FDR, not US tax rates for all time. However, given that the postwar years in the US were among the most prosperous ever experienced by any country at any time, I'm not sure that the 91% top marginal tax really scares me all that much.

As a wage earner in order to get wealthy, you either need to be innovative, or earn well above the average wage earner and make sound investments. In my view, the system is designed to keep wage earners poor. Big business likes having lots of poor competitive wage earners to keep wages low. If everyone were able to become wealthy, then we'd have to open the borders and let in more poor wage earners.

So, the idea is that taxes are not primarily to raise funds for the government, but rather a conspiracy to keep down the McDonald's worker so he doesn't save his money and become rich? That's very... Marxist.

-Jester

[kandrathe]

That appears to be correct. My statement that 79% was a peacetime rate was in reference to FDR, not US tax rates for all time. However, given that the postwar years in the US were among the most prosperous ever experienced by any country at any time, I'm not sure that the 91% top marginal tax really scares me all that much.

It was what pushed the wealthy to move their money outside the US. Also, much of the rest of the world was rubble, so where would you invest your ₤'s? It is also more convenient for avoiding paying estate taxes when the US government has no control over your assets. I remember that by the Reagan years, the tax code was so stuffed with tax shelters that wealthy people often ended up paying zero taxes. This resulted in the tax reform movement in the eighties (1982, 1984).

So, the idea is that taxes are not primarily to raise funds for the government, but rather a conspiracy to keep down the McDonald's worker so he doesn't save his money and become rich? That's very... Marxist.

Every lie has a grain of truth. He and I (and many others) see the same problem and have different suggestions on what to do about it. Examine the results over the last century and tell me what you see. And, being a millionaire doesn't cut it as wealth alone is not the measure of the upper class (capitalist class). As we see these days, money is transient. How many parents can afford $300K per child for a Yale University education? The American sangre azul do exist, and the barriers for entry into the upper class are intentional. In 2007, the top .01 percent of the population received 5% of the income and had an annual income of $9.5 million or higher. It comprises about 15,000 families who are privy to such activities as vacationing in the Hamptons or at their Spanish villa, or attending the annual gala at the Bohemian Club of San Francisco.

[kandrathe]

But just to make things clear; I agree 100% that in many cases taxes are spend in a stupid way. But my ideas are to change this through politics instead of just quite paying taxes.

What do you do when the politicians only bicker? Perhaps it is a smoke screen to prevent *real* change?

The free market makes mistakes in spending as well, but at least the entity making the mistake suffers for their mistakes. When the government makes mistakes, only the people suffer and the government then over reacts spending even more of our money. Every function employed by the government is a free market enterprise denied. Granted, not every function should be private.

The government cannot create wealth, so every dollar they spend was taken from someone else who earned it. We can try to be understanding when the government takes our money for things which benefit us all, although as I said before, they would be more fair if the highest burden was local and the least burden was Federal.

[kandrathe]

I don't see why not. OTOH, when I lived in Georgia, we had motor vehicle inspections (annually I think). The inspections were performed at state licensed gas stations and garages. It didn't take long to degenerate into a farce. Walk in, ask for 'inspection', pay $10 (or whatever), get sticker, leave. Often, the 'inspector' didn't even bother to look at the car (or even leave his booth). Here in Washington, we have emission test every other year. The test is conducted at a state owned facility by state employees. The tests are, in my experience, well run, relatively accurate, and through. State 1, free enterprise 0.

We used to have the emissions test here too. After a few years the number of failures reached virtually zero so they eventually stopped the testing. I'm sure that even the State system could degenerate into a farce.

My guess is that the state employees have nothing to gain by skipping the test. They get paid by the hour, not by the test; they're gonna be there all day anyway. If they fudge the test and get caught, it's probably their job at risk. The 'private' inspectors take a chunk out of the inspection fee. The faster they do the inspection, the more they make. The fastest way to do the job is to do no job at all. And since it represents a small (but easy) bit of income, it is no big deal if they lose their license.

That was the problem in Georgia. No one ever tried to keep the inspectors honest. By winnowing down the providers by axing the corrupt one and allowing a competitive market price the system may have become more effective. Georgia might have also offered a sizable reward for turning in bogus inspectors.

That's the rub with government systems and economic theories. They work very well on paper, but not nearly as well with people. If Everyman was Jefferson, we'd need no government at all. But, as Hamilton saw all too clearly (maybe because he actually spent some time in the trenches) most men are not Jefferson. Maybe, maybe not. I wonder how many inspectors it would have taken to fix Georgia's auto inspection fiasco (they finally just gave up and dropped it, IIRC).

It's more a matter of having to think about everything that might go wrong and having a reasonable answer, observing the system operate and correcting bugs as you discover them.

Not that I disagree with you. But I think that it isn't all as black and white as you sometimes present it. As always, the devil is in the details.

Yes, the devil and I are good friends in that regard. I make my living by designing systems (not just computing btw), and working out the details.:)

[Jester]

It was what pushed the wealthy to move their money outside the US. Also, much of the rest of the world was rubble, so where would you invest your ₤'s? It is also more convenient for avoiding paying estate taxes when the US government has no control over your assets. I remember that by the Reagan years, the tax code was so stuffed with tax shelters that wealthy people often ended up paying zero taxes. This resulted in the tax reform movement in the eighties (1982, 1984).

On the "rubble" issue, investing in that "rubble" with every dime to your name would have been one of the best investments you could have made, the sooner the better. Postwar growth in Europe and Japan was off the hook.

Getting rid of tax shelters and other dodges for the very rich would be among the best possible things you could do to improve the tax code. The more the wealthy pay, the lower taxes can be on the way up. If that's what you're arguing for, making the tax system more progressive by closing loopholes, let me lay down arms right now: we are in entire agreement on that point.

Every lie has a grain of truth. He and I (and many others) see the same problem and have different suggestions on what to do about it. Examine the results over the last century and tell me what you see. And, being a millionaire doesn't cut it as wealth alone is not the measure of the upper class (capitalist class). As we see these days, money is transient. How many parents can afford $300K per child for a Yale University education? The American sangre azul do exist, and the barriers for entry into the upper class are intentional. In 2007, the top .01 percent of the population received 5% of the income and had an annual income of $9.5 million or higher. It comprises about 15,000 families who are privy to such activities as vacationing in the Hamptons or at their Spanish villa, or attending the annual gala at the Bohemian Club of San Francisco.

You're not going to get your Villa on the Costa del Sol, that's true, and the Bohemian Club invite is unlikely to arrive in the mail at a mere million. Far be it from me to talk down the existence of an elite. However, the average joe McDonald's worker is not going to join that elite, except at astronomical odds, since it is not only a product of wealth: it is a product of social status accumulated and inherited across generations.

But... if you were going to grab for the brass ring, break into the elite, buy that silver spoon to put in your kid's mouth, where is that easier than America?* Plenty of the richest economic players, the big-name managers, the most influential polticians, came from relatively humble origins. Now, they probably met the right people at the right time, and it's no easier to make it to the top of the heap for average joe than it ever was, but it is possible. As much as I usually emphasize the aspects of America that are disturbingly closed off to the poor, it is still an open society, and the American dream is still at least tentatively alive.

However, by the numbers, I think being a millionaire cuts it pretty darn well for being "upper class", at least in broad brush terms. Even if your returns are an uninspiring 5% a year, you could live the life of a median household in perpetuity without working another day of your life. You could send your kid (or even two or three) to whatever school they want on that much money, and still have plenty left over, even if they never got a single dime in scholarships. Want that ferarri? A million will buy it for you. If you're more of a foodie (and I am), you could book a table at Per Se for years on end, order the tasting menu every night, and die of cardiac arrest long before your money ran out. A million is still a hell of a lot of money, and if it's not a billion, I think it's unrealistic to expect any given person to see a billion dollars in their lifetime, no matter what talents they may have, or how scrupulously they save.

-Jester

*or possibly Canada!