Dolce & Gabbana held its first fashion show outside Italy in Hong Kong to showcase some of the world’s most expensive clothing, betting that there is still demand from the ultrawealthy for jewel-encrusted tiaras and glittery dresses. Photo/Video: Eva Tam.
The American Decline May Wind Up Doing What Republican Political Agitation Could Not: Arrest the Growth of the GovernmentPosted: October 19, 2013
It is beginning to appear that the “New Normal” of very slow growth — almost indistinguishable from a recession — is going to be with us for a long time to come.
Previous generations of politicians could reach agreements on taxing and spending by punting their differences to the next generation — that is to say, where they could not agree, they could agree to borrow the difference, and expect the next generation to pick up the tab.
This was never moral nor responsible but it was workable so long as each generation was wealthier than the last, so that the next generation would have the money to pay for the previous one’s profligacy and irresponsibility.
What happens when that is no longer true?
Over the past year in China, the ultra-rich didn’t get richer–they got poorer and shrank in number, even as the ranks of the ultra-rich and their assets swelled in other parts of the world.
The number of China’s ultra-rich–those with a net worth of $30 million or more–slipped from 11,245 to 10,675 as the country’s economic growth slowed to its lowest pace in more than a decade, according to a new report from private-wealth consulting firm Wealth-X and UBS AG. Their total wealth also declined, falling to $1.52 trillion this year from $1.58 trillion last year. Read the rest of this entry »
“The United States is actually more dependent on rich people to pay taxes than even many of the more socialized economies of Europe. According to the Tax Foundation, the United States gets 45 percent of its total taxes from the top 10 percent of tax filers, whereas the international average in industrialized nations is 32 percent. America’s rich carry a larger share of the tax burden than do the rich in Belgium 25 percent, Germany 31 percent, France 28 percent, and even Sweden 27 percent.”
Consider what happened each time the U.S. reduced the tax rate significantly:
- 1920s: The top tax rate fell from 73 percent to 25 percent, yet the rich (in those days, those earning $50,000 and up) went from paying 44.2 percent of the tax burden in 1921 to paying more than 78 percent in 1928.
- 1960s: President John F. Kennedy slashed the top tax rate from 91 percent to 70 percent. In the ensuing three years, those making more than $50,000 annually saw their tax payments rise by 57 percent, and their share of the tax burden climbed from 11.6 percent to 15.1 percent.
- 1980s: The Reagan years saw the top rate fall from 70 percent in 1980 to 28 percent in 1988. What happened to the rich? The top 1 percent went from shouldering 17.6 percent of the income tax burden in 1981 to paying 27.5 percent of the total in 1988. The top 10 percent saw their share of the burden climb from 48 percent in 1981 to over 57 percent in 1988.
More >> via Washington Times
“…the wealthiest one-third of members of Congress did well during the Great Recession, although more than 20% of the members were worse off than before. Meanwhile, from 2007 to 2010, the average American’s net worth dropped 39 %, while members of Congress saw their median net worth rise 5%, and the wealthiest one-third of then gain 14%.
In 2004, the estimated wealth of Congressional Republicans was 44% higher than Democrats, but by 2010 they were at the same level. Between 2004 and 2010, 72 Congressmen looked as if that had doubled their estimated wealth…”
More >> Congress Gets Richer…
- Getting Richer in Washington (politicalwire.com)
- The Great Scam: America’s Richest Politicians Get Richer As Democrat, Republican Wealth Converges (zerohedge.com)
CHARGES LEVIED BY THE STATE UNDER THE RULE OF THE AMERICAN DEMOCRACY:
Let us now suppose that the legislative authority is vested in the lowest order: there are two striking reasons which show that the tendency of the expenditures will be to increase, not to diminish.
As the great majority of those who create the laws have no taxable property, all the money that is spent for the community appears to be spent to their advantage, at no cost of their own, and those who have some little property readily find means of so regulating the taxes that they weigh upon the wealthy and profit the poor, although the rich cannot take the same advantage when they are in possession of the government.
In countries in which the poor have the exclusive power of making the laws, no great economy of public expenditure ought to be expected; that expenditure will always be considerable either because the taxes cannot weigh upon those who levy them or because they are levied in such a manner as not to reach these poorer classes. In other words, the government of the democracy is the only one under which the power that votes the taxes escapes the payment of them.
In vain will it be objected that the true interest of the people is to spare the fortunes of the rich, since they must suffer in the long run from the general impoverishment which will ensue. . .
Here we should observe that Tocqueville inclines toward supply-side economics. To continue:
Again, it may be objected that the poor never have the sole power of making the laws; but I reply that wherever universal suffrage has been established, the majority unquestionably exercises the legislative authority; and if it be proved that the poor always constitute the majority, may it not be added with perfect truth that in the countries in which they possess the elective franchise they possess the sole power of making the laws? It is certain that in all the nations of the world the greater number has always consisted of those persons who hold no property, or of those whose property is insufficient to exempt them from the necessity of working in order to procure a comfortable subsistence. Universal suffrage, therefore, in point of fact does invest the poor with the government of society.
The disastrous influence that popular authority may sometimes exercise upon the finances of a state was clearly seen in some of the democratic republics of antiquity, in which the public treasure was exhausted in order to relieve indigent citizens or to supply games and theatrical amusements for the populace. It is true that the representative system was then almost unknown, and that at the present time the influence of popular passions is less felt in the conduct of public affairs; but it may well be believed that in the end the delegate will conform to the principles of his constituents and favor their propensities as much as their interests.
But then Tocqueville provides the remedy that is missing from Romney’s rhetoric—how opportunity and social mobility, rather than redistribution, is the better road to advancement:
The extravagance of democracy is less to be dreaded, however, in proportion as the people acquire a share of property, because, on the one hand, the contributions of the rich are then less needed, and, on the other, it is more difficult to impose taxes that will not reach the imposers.