During the campaign, many people expressed outrage over Mitt Romney’s statement concerning the fact that almost fifty percent of the public do not pay pay income taxes. I well understood the anger, but I am a bit surprised that a video by the California Federation of Teachers has not produced the same outrage over its unfairness and frankly crudeness. The video shows a wealthy person urinating on the poor as part of a “Tax the Rich: An Animated Fairy Tale.” I readily admit that I am in the minority on our blog in opposing some of the tax increase proposals in this country and abroad as economically unwise. However, the demonization of the wealthy in this country has gone a bit far when a video of this kind is released by a major organization.
Real Clear Politics and a few sites ran a story on the urination scene, but the video below has the sound but not the image of actual urination. It is not clear if someone added the yellow image to the video or the producers removed the image. When you now hit on various sites that showed what they said was the image of the urination, a sign pops up that this is now a “private video.” I am unsure of what that means since the union reportedly put the video out to the public. However, there is no mention of the controversy that I could find on the union site.
The eight-minute video was written and directed by California Federation of Teachers’ communications director Fred Glass with voice over by Ed Asner. The mythical land describes rich evading taxes by investing in “Wall Street” — not quite mythical. “Don’t worry. This is good for you, too. Because it will trickle down from us to you.” You can still hear the sound of the rich man “trickling down” on the poor.
Viewers are urged to email their elected representatives to tell them to raise taxes on the wealthy in order to fund public services.
I happen to agree with the premise of raising revenues (though I oppose some of the tax proposals in this country and abroad). I am a long and vocal supporter for increasing funding for schools and teachers. However, I view this video as unfair and hyperbolic even without the yellow stream. The wealthy do pay considerable taxes and many support public programs and public causes. They also do pay the vast majority of taxes. Should they pay more in this economy. Yes, but it is grossly unfair to engage in this type of vilification. The video for example states that after the housing market crash the government printed money for “rich people” but they didn’t give any to “ordinary people whose houses and jobs were broken by the crash.” The video also states that after the collapse that rich people “love their money more than anything in the world.” That is simply outrageous. What would be the reaction to a business group releasing a video stating poor people do not care for other people and do not want to work? There would be justified anger and outrage, but the reaction to this video seems to be muted from the left. It is not enough to simply shrug and again blame the other side triggering such responses. Whatever the excesses of the other side of this debate, it does not relieve adults of being the obligations of accuracy and decency. As an educator myself, I am embarrassed to see any teacher’s organization engage in such attacks.
I am interested in whether the union did include the even more offensive image and removed it or whether it is claiming that conservative groups hacked their video. If it is the former, I do not believe that they have served the interests of teachers who generally strive to engage in reasoned and respectful debate. If it is the latter, I would love to know who added the yellow image and left the appearance that it was in the original video. The union itself has thus far said little on the controversy. [UPDATE: the original video is posted here and shows the yellow image. It would appear that the union has altered its own video though I cannot find any statement from it on this controversy].
The current video is shown below.
While Worker Pensions Fail, CEOs Get Rich
CBS News
11/19/2009
http://www.cbsnews.com/8301-18563_162-5714036.html
Excerpt:
The traditional pension is quickly becoming an endangered species. But today, a government report found some executives have gotten huge retirement packages, even as their companies were dumping employee pension plans onto taxpayers as CBS News correspondent Sharyl Attkisson reports.
At the very same time pensions were drying up for 122,000 United Airlines workers, its top executives were cutting deals to make their own golden years comfortable and secure.
CEO Glenn Tilton, CFO Frederic Brace and COO Peter McDonald together got $7.6 million worth of retirement benefits in four years – from 2002 to 2006 – and earned a combined $55.5 million compensation, with perks like a car and driver and country club memberships.
That’s one small sample of the outrage packed into a new Government Accountability Office report. It studied 10 of the largest companies to dump their underfunded pension plans into the laps of the federal Pension Benefit Guaranty Corporation, which is $22 million in the red.
Together, the 10 companies underfunded their pension plans by more than $11 billion affecting 200,000 workers. But their executives drew a total of $350 million in compensation.
The 10 companies are not named in the report, but CBS News has learned that they are: Polaroid, United, US Airways, Reliance Group, Republic Technologies, National Steel, LTV Steel Corp., Pillowtex Corporation, Westpoint Stevens, and Harvard Industries, Inc.
Reliance Group Insurance underfunded its plans by $121 million in the five years before it failed. But its top management brought home $70 million in salary, bonuses and benefits. Chief executives Robert Steinberg and George Baker used the corporate plane and helicopter for $200,000 worth of personal travel. That included family trips to China, Greece and Hawaii.
If the Pension Benefit Guaranty fund can’t get out of the red, it’s taxpayers who will have to pick up the slack. That’s why some members of Congress think they should step in.
Krugman explains, though he admists the picture is incomplete:
” . . . the wage gap between workers with a college education and those without, which grew a lot in the 1980s and early 1990s, hasn’t changed much since then. Indeed, recent college graduates had stagnant incomes even before the financial crisis struck. Increasingly, profits have been rising at the expense of workers in general, including workers with the skills that were supposed to lead to success in today’s economy.
“I don’t know how much of the devaluation of labor either technology or monopoly explains, in part because there has been so little discussion of what’s going on. I think it’s fair to say that the shift of income from labor to capital has not yet made it into our national discourse. ”
http://www.nytimes.com/2012/12/10/opinion/krugman-robots-and-robber-barons.html?hp
. . . and hope you had a good weekend too, Mespo!
Mespo asked question on Dec 7 @ 2:27, and I gave quick answer which I will quote in full and make additional comment (don’t know if Mespo is even following the thread anymore . . . haven’t seen him appear. Any way:
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“Mespo says —-> “Would you agree that however you characterize it, the rich are doing more financially than those who pay less? If so, would you agree they get exactly the same governmental services as the guy paying less or nothing at all? If you agree with those two statements, how you define “fair” except in confiscatory language?”
I’m on the way out the door for the weekend, but to quickly answer your good question . . .
1 )the “rich are doing more financially”, to me, is a quintessential question of relativism. It is meaningless except in absolutist kind of universe
2) That the rich “get exactly the same governmental services” can also be seen in an absolutist way; who could argue. But in the real world, the rich DON’T NEED many governmental services because they can pay to circumvent/supplement them. Think gated communities with private police forces; think private jets; etc. Of course at some point when the infrastructure tumbles to the point that the chauffered limo can’t get to the airport even the rich might not be able to buy their way out of a jam.
3) I suppose my definition of “fair” might equate to another’s concept of confiscatory — though maybe not in the legal sense. I don’t imagine even I would say fair was only that level of participation at which everyone suffers the same deprivation or surplus.
There are many degrees of well being between poor and filthy rich, and I don’t think we are in danger of the system abetting such confiscation that the rich will howl with pain for a serious reason.
I’m less into theoretical definitions that real life practicalities.
Sorry, out the door.”
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Additional comment:
Mespo gives an extremely narrow and technical reading to the notion of fairness in the tax code, such that no one could argue the conclusion that the rich are paying more, notwithstanding that the burden on the rich has decreased significantly over the past few decades, without even including the notion of loopholes and tax dodges that the rich, and the corporate framework that contributes to their wealth have benefited from.
My additional points are these:
1) On the “confiscatory” strawman: I am fully confident that the Citizens United Supreme court will adequate protect their corporatist minded sympaticos, and see no irremediable prior harm that will be done that the Court will not readily address
2) Of a more touchy freely nature: comparing poor/middle class dollars, and rich dollars, one for one, is barely laughable. In the real world, a ‘rich dollar’ is throwaway money’ that probably goes into investment, expenditure or savings that has little negative impact, probably positive, on the rich’ bottom line, and certainly does not reduce money available for reasonable esssentials. As we go down the economic scale, each marginal dollar is more and more critical to the overall health and well being of the taxpayer, with each additional dollar extracted being reflected in some marginal deprivation (whether you consider it frivolous or critical it has an impact)
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Sorry to have truncated my reply. the question of rich vs poor/middle class comparisons being a matter of equal footing as far as economic impact is one that strikes valid emotional notes, but is apples and oranges in the real world.
Could this be the Trojan horse that lowers the amount to be paid out in the false belief that social security is facing bankruptcy? or in lieu of raising the ceiling?
ELaine, good analysis of “only the little people”.
Question: The payroll tax relief that Congress and Obama have provided, is it relief from social security taxes? The amount paid is a factor in determining the amount of social security that one receives later on. Could this be the Trojan horse that lowers the amount to be paid out in the false belief that social security is facing bankruptcy?
February 23, 2011
The Little People Pay Taxes
By CATHERINE RAMPELL
Jennifer Graylock/Associated Press
http://economix.blogs.nytimes.com/2011/02/23/the-little-people-pay-taxes/
Excerpt:
Leona Helmsley’s legacy lives on in the building that bears her name.
Over at tax.com, Martin A. Sullivan, an economist and contributing editor to Tax Analysts, has a fascinating post on the tax rates paid by the residents of the Helmsley Building. The building’s tax-evading billionaire namesake, as you may recall, supposedly once said, “Only the little people pay taxes.”
Mr. Sullivan shows that she was mostly right.
The building has its own ZIP code, and so Mr. Sullivan was able to use Internal Revenue Service ZIP code records to find data on the 130 individual tax returns filed by residents of the building in 2007. He then compared their tax liabilities to the estimated tax liabilities of the blue-collar workers employed by the building.
He found that the average adjusted gross income in the tax returns of people filing from the building was $1.17 million. Which is of course impressive. More impressive, though, is the tax rates this group pays.
The table below shows the total income and payroll tax liability of a typical resident of the Helmsley building, alongside the same tax liabilities of janitors and security guards earning the average wages for the jobs in the New York area…
As you can see, the average effective income and payroll tax rate for individuals filing from the Helmsley Building was 14.7 percent of their adjusted gross income. By contrast, the income tax rates for the typical New York janitor and security guard were 24.9 percent and 23.8 percent, respectively.
But we have a progressive tax system, you say. What can possibly account for millionaires paying a much lower tax rate than blue-collar workers?
A lot of it has to do with payroll taxes, which, as our Daily Economist Casey B. Mulligan has written in the past, are highly regressive.
In 2007, only the first $97,500 of wage and self-employment income was subject to the Social Security portion of payroll taxes, at a 12.4 percent rate. (The ceiling today is slightly higher.) Everything above that ceiling wasn’t subject to Social Security taxes. As a result, high earners pay a smaller share of their income in payroll taxes than low-earners do.
Additionally, most workers — the bottom two thirds of tax-filers — pay more in payroll taxes than they do in income taxes.
Report: A quarter of U.S. millionaires pay taxes at a lower rate than some in middle class
By Lori Montgomery
October 12, 2011
http://articles.washingtonpost.com/2011-10-12/business/35276617_1_buffett-rule-income-in-federal-taxes-lower-tax
Excerpt:
A quarter of millionaires in the United States pay a smaller share of their income in federal taxes than many middle-class families, according to a new congressional analysis that offers fresh support for President Obama’s push to raise taxes on the nation’s wealthiest households.
The report, by the nonpartisan Congressional Research Service, found that when all federal taxes are taken into account — including those on wages, investment income and corporate profits — some households earning more than $1 million a year paid as little as 24 percent of their income to the Internal Revenue Service in 2006.
That’s substantially less than the share paid by many families making less than $100,000 a year that faced a top effective tax rate exceeding 26.5 percent, the report said.
All told, 94,500 millionaires paid a smaller share of their income in taxes than 10 million households with moderate incomes, the report found.
I think the video’s better WITH the yellow image. It really explains a “trickle-down” economy.
As to being respectful, I actually don’t respect the actually unlawful and certainly larcenous behavior of the money-politicians who have made it impossible for our country to ever achieve democracy. I’m not prepared to feel bad about their tender sensibilities. After all, they don’t mind if a six-year-old in Kentucky has a tooth-ache tonight and cries for hours. THAT’s what I would call disrespect.
Here’s one for you:
http://www.newyorker.com/online/blogs/borowitzreport/2012/12/billionaires-warn-higher-taxes-could-prevent-them-from-buying-politicians.html?mbid=nl_Borowitz%20(57)
Bron,
Unfortunately it’s laissez-faire capitalism blended with Italian fascism.
Elaine,
Those poor Wall Street big shots! How can anyone survive with only one hundred thousand dollars for a bonus?! What a disconnect.
rafflaw,
From across the pond:
Top 1% Tax Cut Bigger Than 99% Income
Wealthy CEOs Want Tax Breaks, Cuts to Poor and Elderly
oro lee:
“To refuse to recognize that the state is mostly responsible for the ability of people to create any earn wealth is the height of hubris;”
people created wealth before there were states. A proper government according to John Locke is to protect life, liberty and property and that is all.
Why would anyone become a citizen of a state if their life, liberty and property were not protected? Why not just stay in the state of nature and take your chances?
Goldman Sachs Receives Fine That Will Take It 24 Minutes To Pay Off
The Huffington Post | By Mark Gongloff
Posted: 12/07/20
http://www.huffingtonpost.com/2012/12/07/goldman-sachs-fine-24-minutes_n_2259038.html?utm_hp_ref=business
Who says the government is going easy on Wall Street? Goldman Sachs just got slapped with such a huge fine that the firm might have to miss an entire episode of Spongebob Squarepants making it up.
That’s how much time it will take Goldman to make up its latest regulatory penalty: About 24 minutes, or one Spongebob, if you fast-forward through the commercials.
The Commodity Futures Trading Commission brought the hammer down on Goldman Sachs on Friday for failing to keep a close eye on a trader who, back in 2007, used fake trades to hide an $8 billion trading position from regulators. Goldman fired the trader, but it also sort of took its sweet time notifying government regulators about the trader’s shenanigans, according to the CFTC.
The trader ultimately cost Goldman $118 million in losses, but that wasn’t enough to satisfy the merciless CFTC, which slammed Goldman with a fine of $1.5 million. Say it Dr. Evil style and it sounds even worse.
Now, $1.5 million buys a lot of calamari. Such a fine would bankrupt the vast majority of the human beings on earth, and more than a few companies.
But Goldman Sachs generated $8.35 billion in revenue in the third quarter of this year alone, or a little more than $63,000 per minute. At that rate, Goldman will be able to pay off its $1.5 million fine in just under 24 minutes.
In contrast, it would take Goldman nearly 516 minutes, or a little more than eight and a half hours, to pay for the cost of CEO Lloyd Blankfein’s new house in the Hamptons, for which he reportedly paid $32.5 million.