Over the weekend, former national security advisor Zbigniew Brzezinski spoke the following when he accepted the Jury du Prix Tocqueville Prize in France:
The foregoing observation is especially relevant to our understanding of the challenge facing contemporary America. Though a democracy, it is becoming a country of socially ominous extremes between the few super rich and the increasingly many who are deprived. In America today the top 1% of the richest families own around 35% of the entire nation’s wealth, while the bottom 90% own around 25%. It should be a source of perhaps even greater concern that the majority of all currently serving Congressmen and Senators, and similarly most of the top officials in the executive branch, fall in the category of the very rich, the so-called top 1%.
At the same time, though still a unique super-power, America finds it difficult to cope with the consequences of the increasingly accelerating global changes that are spinning out of control, both on the socio-economic and on the geopolitical levels. Socio-economically, the world is becoming a single playing-field in which 3 dynamic realities increasingly prevail: globalization, “internetization”, and deregulation.
Today instant financial transactions involving billions of dollars occur literally in seconds; often essentially speculative in character and unrelated to either technological innovation or new forms of employment, they create instant wealth on an unprecedented scale for only a few. Investments and employment opportunities abroad, guided largely by opportunistic self-interest, now transcend national interests.
Politically, that very same world – despite the seeming concentration of global power in the hands of the very few states with enormous economic and military capacity — is witnessing the dispersal of power. The West is declining because it lacks the will to unite, while the East is rising but also facing the danger of selfish rivalry and potential conflicts among its principal states. Neither existing national governments nor rudimentary regional arrangements are capable of providing effective discipline, not to mention asserting control, over the autonomous financial-economic universe so recently shaped by globalization, “internetization”, and deregulation.
Brzezinski’s words are sobering if one looks at the news of the past year, both here and abroad. His entire speech can be read at the CSIS website. Many Americans have become disturbed by the fact that the extremely wealthy have become so powerful politically, especially behind the scenes. George Soros and the Koch Brothers have become symbols of manipulation of both money and politics. While people like Warren Buffet, Bill Gates, Oprah Winfrey and Steve Jobs have had the reputation for being great philanthropists who have given billions back to those less fortunate, how many others continue to pad their own pockets?
Brzezinski feels we need to make those very rich more transparent. Who are they and what do they do for others? More controls are needed over hedge funds and banking according to Brzezinski. He calls for social awakening so that more people are are of those holding great wealth; the 1%.
Meanwhile, in addition to discovering who is holding the wealth, we need to determine what these wealth holders do to give back. We need to ask ourselves why our politics are to protect these people and what influence these people have on those very worker bees who are out there protecting the wealthy. We already see that members of Congress are part of the elite subset and you had better believe they are going to be protecting themselves.
Not every rich person is a jobs producer. Not even close. Many people use money to make even more money in investments and speculation. Show me the jobs that have been produced. You can’t. There are too few. Some of those being called “jobs producers” aren’t producing jobs with their personal wealth. They are using corporate money. Anyone can do that. Steve Jobs is a good example there. He was paid $1 per year.
Americans need to pull the wool from over their eyes and see that the term “job producers” is just another gimmick. Protecting job producers is an easy fix. Write in tax code that protects them when and if they produce a job. Deal done. Now, let them pay their fair share, because they aren’t. Who was it that said something about the rich killing the poor? Oh yes, Zbigniew Brzezinski who said: “Its easier to kill a million people…than it is to control them”
An excellent speech by Mr. Brzezinski. It’s high time that our elected officials represent the interests of the 99 percent of the people who put them there. It’s time to take our country back from the 1 percent who want to keep us in perpetual poverty!
I have a question for the left of the peanut gallary.
Why do I or others that are part of the 99% protect the billionaires? Serious question.
I have no idea why billionaires are protected. They are more than capable of protecting themselves.
@marinm
That’s a question those supporters will have to answer. Seriously.
Because it never stops there. Ever. Once they get momentum behind “raising revenue” they always come for you, eventually. And if it’s not an outright tax it’s fees generated by regulations, like the debit card fees.
@Cato the Elder
No fair. I want to hear from the people that want to hang and eat the rich.
I want to know – atleast from their perspective – why it is they think that a regular joe like me protects the 1%?
Why doesn’t the arguement that I should take what I haven’t earned not resonate with me and others?
I really am curious.
Because they are our fellow citizens with equal rights under the law. It is wrong to treat others different due to race, creed, political persuasion, etc…..
It is wrong to treat others differently because of there income/asset level. No benefits OR penalties.
Selective enforcement of law or treatment of citizens under laws is the first sign of tyranny.
@marinm
Sorry….should have waited for the others. I’m sure that they’ll answer the same.
2nd guess time. Mental illness?
oh marin, a 1% tax hike on earnings is hardly ‘eating the rich.’
Question: How much tax (what percent?) does a hedgefund owner pay?
Just looking over the names of the rich mentioned in this post, Warren Buffet, Bill Gates, Oprah Winfrey, Steve Jobs, George Soros and the Koch Brothers. None of them started off “wealthy.” Buffet’s dad was a US Congressman, perhaps upper middle-class. The Koch brothers carried on the firm their dad started. The common factor with all of these people is that they built their own wealth, and in the process created jobs, capital and investment for the economy.
I don’t want to appoint the government as the decider of who gets to be “rich” and who doesn’t. That’s the best way to kill off job creation and economic growth. The “job creators” are largely middle-class businesses also. The S-Corporation that reports over $250,000 in income and is thereby derided by Obama and company as the rich who don’t pay their “fair-share.” OK, let’s tax the crap out of them and see who still wants to invest, grow a business and create jobs.
Wealth, economic growth and jobs do not come from the government. They come from the people listed above (well-known, and not so well-known owners of S-Corps and such). Let’s stay on the path of rising taxes and government meddling and watch the unemployment rate languish around 10%, and maybe even go higher.
@Moon-howler
I had hoped my question didn’t go the path of name calling. I have a real question.
What drives a person like me – a paycheck or two away from poverty – to defend Koch and Soros?
1 vote for me being mentally ill. Check.
Any others?
@Moon-howler
What is that 1% tax hike supposed to accomplish? Truly? It won’t affect the debt, deficit, or bring in an appreciable amount of money. And it won’t close the “gap between the rich and poor” or bring anyone up. What is the purpose of the tax?
Of course, I’m talking about the rich as your previous statements have put out…those making millions…not Obama’s $250K.
Keep in mind also that hedge funds and people like Warren Buffet get most of their income from capital gains and other investment-related activities. It’s not ordinary income subject to the usual tax brackets. Raising taxes on capital gains would be disastrous. Capital gains are the rewards to risk-taking that creates jobs and economic growth.
Also, wealth rarely stays in families more than one or two generations after it is created. Paris Hilton is an annoyance and no one wants to protect her money, but she is often used as the poster child for raising taxes. That’s trivial, however. Typically, with wealth being transferred over multiple heirs and frittered away by generations of buffoons (i.e., Paris Hilton) it doesn’t last long. Shall we destroy economic growth and job creation just because nobody likes Paris Hilton?
NTK, jobs certainly do come from the government. Perhaps you’ve been one of the metro area residents who has been employed at one time or other by state, local, or federal government. Many people end up in the armed forces because there are no other jobs in their hometowns. How about college profs? A lot of those are government workers.
Wealth also can come to those workers with the right contacts after they leave when they start companies which rely on their knowledge. And jobs come with those companies that use that knowledge.
What’s wrong with going back to the tax rate prior to Bush’s tax cuts? If those cuts are working so well, where are the jobs?
Actually,Zbigniew Brzezinski is right in that we will have to reassess many facets of our lives due to a global economy. The small town where I grew up had a disproportionate number of millionaires because it had a practical monopoly on a product which is used in nearly every home and many offices. However, it now has an unemployment rate approaching 14 or 15 percent. Not only is the product subject to the housing bubble bursting but it’s also subject to the whims of fashion. And for years the producers blew off competition from China because they thought the product too bulky to transport profitably. Well, that’s changing too. I don’t know that that product or that town will ever prosper as it did in the past. Global competition will change our employment rates, incomes, and many other aspects of our lives. It’s time we looked at the right issues and not the small potatoes stuff like abortion, gay marriage, whether we can tote a gun into an elementary school, etc.
Global competition will change our employment rates, incomes, and many other aspects of our lives.
Amen.
So….you support making business in the US MORE competitive, right?
@Cargosquid
I think it may require a larger rethinking. Perhaps more alliances. Perhaps more government backing of certain start-up technologies. Perhaps a better infrastructure to transport products. Perhaps higher taxes to pay for these things.
@marinm
No one called anyone a name. I suggested mental illness as a reason why middle class people would protect the billionaires from a small tax increase, especially when considering that many don’t even acquire wealth from earnings.
Mental illness is not a name. It is a condition that affects a portion of the population.
@Need to Know
I oppose raising taxes on capital gains also, for selfish reasons. However, hedge fund owners are taxes totally differently than say a mutual fund manager. Those kinds of inequities could be shored up. At what point do those living on capital gains at 15% get to ride that train? Perhaps after a certain amount of money acquired the rate might nudge up a little.
@Cargosquid
President Obama moved that $250k upwards a long time ago.
@Need to Know
Virginians aren’t going to buy into wealth only staying around a generation. Just a drive out through Purcellville and The Plains disputes that argument.
@Moon-howler
ok. but my questions still stand.
@Censored bybvbl
I am dying of suspense. What was the product? Is this going to turn into a blog lottery?
Last Thursday afternoon, another redundant anti-abortion bill was rammed through the House. No jobs bill, just anti abortion. Meanwhile, no jobs bill, no immigration reform…just anti abortion. Now the Catholic Colleges are all howling because their health plans have to provide contraception. Where does it end? This is the modern frigging world. People cannot continue to have more children than they can afford. I don’t care about their teachings. Have a policy that provides contraception as part of the plan. No one is holding a gun to someone’s head and making them take it.
I am wondering when Griswold vs Conn. is going to be overturned now.
Cargo really does NOT want me to answer his questions. Bullying will not work either.
@Censored bybvbl
Censored, yes the government does create bureaucracy and that means jobs. However, those jobs do not represent a growing economy, and they require taxing private resources. Before anyone goes ballistic, I will acknowledge that many of the government jobs are useful – teachers, police, military, some of the Federal bureaucracy. However, in order to have the resources to fund those positions private, wealth creating jobs need to come first. Government creates none of them.
Moon, the sort of wealth in Purcellville, The Plains, etc. is trivial compared to the fortunes being made today. The Hiltons and others will likely have more family wealth than most of us for a long time to come. The Gates, Buffet, Soros, etc. fortunes are what concerns most people. Two or three generations removed, none of them will pale in comparison to what they are now.
@Moon-howler
Why don’t I and I’m not bullying. I’m asking. I really am curious about what you feel a 1% tax increase on the upper 10%? 5%? do. I’m not sure where the percentage cutoff is for your rich people.
If we are raising taxes for the purpose of paying for our spending….ok. that’s a reasonable goal. UNLESS we keep increasing spending.
I would accept a 1% tax increase on everybody if it was dedicated to paying down the debt. But, since spending is never cut, such a tax increase is useless.
@Need to Know
Wealth is wealth, from my position here in Manassas. 🙄
I believe cops, teachers, the military are essential, not just useful, to a civilized society. I would add firefighters in there also and not just because PWC has the best looking ones in the state.
I was unaware that you (or I) were protecting billionaires. The funny part is that folks think they can actually HURT billionaires. Billionaires have the lawyers….You can’t “get” them, you can’t hurt them, and if you come after their wealth, they’ll use their lawyers to keep you away, or at least make sure that whatever you take from them they can pass right along to you again. Hey, you want to go after Billionaires? Sure, go right ahead…..see if everything gets all rosy and happy.
That was the best part of “health care reform” (which they are now figuring out won’t work, and pulling the plug on key pieces of it)….the trial lawyers got everything they wanted. Me? I got some nice fat cost increases out of it. Until people figure out that what’s good for the country is to stick it to lawyers in every way possible, they’re going to laugh all the way to the bank, while we pay through the noses.
There is some sort of flawed logic going on here with the conservative set. Those of us no don’t want to protect millionaires and billionaires from a small tax hike don’t want to devour them either.
No one here has ever said they want to harm them.
@Moon-howler
Teachers, firefighters, etc., I’ll agree that they go behind useful to being essential. That wasn’t my point. Creating a teacher or firefighter job, however essential, does not create the wealth needed to support the position. You must have private economic activity taking place and creating wealth that you can tax to pay for the teacher or firefighter. You can’t borrow or have the Fed create money perpetually to finance the public employee.
The more you tax and have government meddle, the less private economic activity there will be to create the wealth to pay for the teachers and firefighters.
marin – a good question.
I do not know why someone would want to protect the truly wealthy from paying the same percentage of taxes as I do – just why do some companies, millionaires and billionaires pay less of a percentage than the masses? While AMT affects me, it is phased out if you make enough.
The real mess is in the incestuous corporate boards, which reward CEO’s and other executives for failure – and at salaries and perks that are way over board. Look at Leo from HP – http://www.reuters.com/article/2011/09/29/us-hp-idUSTRE78S6KQ20110929 – after a lousy job (nearly 50% reduction in stock price), he is rewarded with millions. We have CEO’s who get rewarded for laying people off – taking home more money that what they saved, and having the real workers pick up the slack and work more unpaid hours.
So, can you enlighten me as to why you think truly wealthy people should pay less than you in taxes?
“hurt” wasn’t the key word. It was a simplification. And….increasing my taxes one dime isn’t going to be taken the same way as buying me an ice-cream float. “We don’t want to hurt them, we just want more of their money”. Yeah, what are we conservatives thinking?
I’ll take that one. First let’s get things straight – what we’re talking about is the difference between dividends and cap gains (15%) and income (35%). Let’s use Ms. Howler as an example. Ms. Howler likes to live on the edge with the silver speculators. It is highly likely that the money that Ms. Howler is using to support her gambli…. er, I mean speculation has already been taxed as regular income at 35%. Now, Ms. Howler knows that when one chooses to swim with sharks in the silver pits that one also risks losing a leg or an arm in the process. There are inherent risks involved when you invest that money – you could make a tidy profit or you could lose your shirt. The government does her a small favor by only confiscating 15% of her gains when they come back to mug her the 2nd time.
Capital gains and dividend rates are the government’s way of inciting people to take risks and invest their money.
@Need to Know
they go BEYOND useful to being essential – my typo
@Cato the Elder
Except Mrs. Howler might sell before a year and therefore be thrown right back in with the sharks.
So my gambling habit is only a small one. I live like the rest of the dogs in the pound. Let’s talk about those who really do not earn income but who live off of capital gains. At what point…..is enough enough. How about someone who is earning $10 million working for Company x. They aren’t producing jobs with their own money and I feel certain they are not being taxed at 35%. They have figured a way around it. I think those are the people Pat is questioning, not some fixed income person like me.
@Cato the Elder
Cato,
what about executives that can defer compensation, divert compensation to trusts and engineer capital gains distributions (instead of income, back dated stock options)? Not to mention off shore investments trying to avoid taxation altogether?
The middle class has been on a diet – and the wealthy get more wealthier, while the number of poor grows – it is not good for society. TARP proved one thing – that the banks have no moral compass – they still collected their bonuses, even as the bank they were running was failing, and defaulting on its obligations.
@Moon-howler
Ok, so first of all, how do you know they don’t indirectly produce jobs? I mean, capital formation is pretty complex. In this environment even if you’re sitting on a lot of cash it’s pretty damned difficult to create a job. Small businesses go to the banks or to private equity players to get capital, but they’re not going to ask for working capital unless they see real demand to fuel expansion. You can’t just throw money around and create jobs, it’s like pushing on a string. It’s not that they don’t want to hand out the money they’re sitting on, everyone and their cat with capital reserves wants to make a return on their cash by lending it out, it’s that there’s no demand for it.
@Pat.Herve
Right, so you’re talking about all the loopholes and clever stuff that people do to manage their tax liability, and I completely agree with your sentiment. All those things you describe create distortions that artificially route capital to places that it doesn’t belong resulting in inefficiencies. You won’t get me to argue for loopholes and deductions – in my world there would be none of either.
I stand by my statement that the capital gains and dividend rates should be substantially lower then the earned income rates, for reasons previously stated.
@Cato and who says they are producing jobs?
Let me put it another, more understandable way: If I hear the term ‘job producers’ too many more times I am going to barf. It is meaningless political rhetoric. I am just not in the business of protecting billionaires from a 1% tax hike at my own expense.
Meaningless political rhetoric? Like characterizing people who make 200K as “millionaires and billionaires?” That’s precisely where the line is in the legislation that Obama walks around encouraging Congress to “pass right now” like some Tourette’s patient.
Wait a minute – you’re right; that’s not rhetoric, that’s a baldfaced black-letter lie.
Back to your original post – if I’m reading you correctly you’d like to see a spreadsheet with the name and address of every individual over a certain net worth, along with a full disposition of their assets and a weekly status report from them detailing their activities, is that about the size of it?
Must be a different language, Cato.
From bloomberg.com:
@Moon-howler
The funny thing about that is that NYC depends upon high taxes upon the wealthy. Mayor Bloomberg says that’s about 40,000 people, in his calculations and his definitions of wealthy.
And they’re starting to leave NYC.
More power to the NY voters. Send some of those rich people down to Virginia.
I am sure Mayor Bloomberg has a much higher standard for wealthy than I do.
So you are basing this mass exodus on what? I am not sure what you are trying to say.
I have no objection to the city or state of NY to tax it’s citizens at whatever rate they desire and can enforce.
I don’t have enough time to answer Pat’s response. The kids are fussy tonight. I’ll get to it as soon as able!! 🙂
What are the kids going to be for Halloween?
Cato – I do understand the reasoning behind the lower capital gains rate – to get people to invest (social engineering similar to the mortgage deduction, by my thinking) – but, does a higher capital gains tax really mean that there is no investments? People were investing and inventing when the capital gains tax was in the 20%-49% rates.
Is the 15% rate just another form of stimulus that was brought in 2003? Has the lower rate caused more volatility in the stock market?
@Pat.Herve
“I do not know why someone would want to protect the truly wealthy from paying the same percentage of taxes as I do – just why do some companies, millionaires and billionaires pay less of a percentage than the masses? While AMT affects me, it is phased out if you make enough.”
I’m sure you don’t mean this Pat. The very wealthy are protected because they pay for the election of those who write the rules to protect the wealthy. There is no such thing as a citizen legislator–certainly at the federal level and often at the state level. Many writers on this blog invoke “the founding fathers” and I would say if the founding fathers could see us know, they would be ashamed of what we have allowed our legislators to become. They are simply highly paid shills for the wealthy. Or more appropriately, they are prostitutes–selling to the highest bidder.
I don’t know.
@Moon-howler
The mass exodus, as per Mayor Bloomberg, is being caused by high taxes.
@George S. Harris
You would love P.J. O’Rourke’s Parliament of Whores and Eat the Rich.
“they would be ashamed of what we have allowed our legislators to become.”
Amen.