Taxing the Successful

High earners are going to have to pay more than our fair share of the costs of government to make things work. But how we frame the debate matters.

Balloon Juicers Doug J and E.D. Kain are irked with Andrew Sullivan‘s statement that,

Why are so many on the left incapable of acknowledging that many people who are rich – but, of course by no means all of them – earned it the hard way? Until more liberals internalize this, they will fail to persuade America of the occasional need for government because people will rightly suspect that what they are really about is penalizing or diminishing hard work.

Doug’s rejoiner is , essentially, Why does Andrew care what liberals acknowledge?  After all, he reasons, a desire to raise the marginal tax rate to not “much over 40%” is already a great favor to the rich.

But the reason people like Andrew and myself wish the basic fact that most high earners got there through the dint of their own efforts acknowledged in the debate is that it’s crucial to a civil society.

We need a lot of money to fund a lot of public projects.  That would be true even if we just funded the ones that 85 percent of Americans agreed absolutely had to be funded.  And people with money are, by definition, going to have to pony up most of it.   But to confiscate it from the successful without acknowledgment of the sacrifice this entails is to court resentment.

Erik gets this part right:

Serious people outside the Anti-Tax Cult believe two things about taxation: first, that taxes are a necessary evil because they pay for services, and second that the government is often pretty lousy at the actual administration of those services – but nobody else is going to do it any better. Hence, necessary evil.

Naturally taxing something means we get less of it – so you tax carbon, you get less carbon. You tax productivity, it’s quite likely you’ll get less productivity. That’s a fine argument against the income tax on its own merits, but so far nobody has come up with a better alternative. And we still have to pay for all those services. The income tax was devised because it’s a sensible way to levy taxes, not because evil liberals are trying penalize hard work. Nobody likes to pay taxes but we do it because we recognize, as a society, that we all benefit from public roads and public education and so forth.

But he goes off the rails here:

Of course, Sullivan wants to have his cake and eat it too: he supports many of the big expenditures coming out of Washington during Obama’s tenure but also mocks liberals as being somehow resentful of success who want to punish hard work. I think it’s much more likely that liberals want to levy taxes to pay for things like the Affordable Care Act which Andrew supported.

But Andrew agrees!  The post, “The Successful,” is a short rejoinder to Jamelle Bouie’s post questioning his use of the phrase “the successful” to describe high earners in a previous posting titled “Should We Return To Clinton Era Tax Rates?

In reality, even the Tories are raising taxes because any attempt to tackle the debt realistically requires that. The Bush tax cuts became unaffordable as soon as we launched two wars. They were designed to end now. They are way lower than anything before Reagan, and the money has to be found somewhere. And what are the odds that the GOP will find $700 billion in “waste” next year? C’mon.

I think the ideal balance is roughly $2 of spending cuts for $1 of tax hikes. Most of the tax hike is going to come from people like me; and I don’t like it, and do think it adds a disincentive to work harder. But I also realize that spending cuts in entitlements will hurt many and we’re all in this together (or should be). If we don’t do something serious soon, the US will default, and these worries will seem puny. And there’s no one’s income left to tax but the successful’s – and a gas tax or VAT (the better options) seem totally unacceptable to most Americans. So let’s get on with it, and stop this 1980s posturing.

And, even in the five sentence posting that Doug and Erik directly link and critique, Andrew ends, “By the way, I favor an inheritance tax. But I also favor allowing those who work hard to keep as much of their own money as possible.”

I’m torn on the notion of estate taxes — simultaneously thinking a permanent aristocracy of wealth is a bad thing for a Republic while squeamish about the implementation — and theoretically in favor of taxing consumption rather than income.  But an income tax is the reality we’re stuck with for the foreseeable future.

So, I agree with Andrew both that those of us who have been relatively successful are going to have to pony up most of the bill and that the rhetoric of class warfare is not the right way to persuade us of that.

FILED UNDER: *FEATURED, Economics and Business
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. ponce says:

    No offense, but does it really matter what you and Andrew think?

    A large majority of Americans favor raising taxes on the wealthy, an in a democracy, that’s enough.

  2. James Joyner says:

    A large majority of Americans favor raising taxes on the wealthy, an in a democracy, that’s enough.

    A majority voting themselves a share of a minority’s money without the consent of said minority is a recipe for social discord. Andrew and I are saying that it’s possible to get that consent. There was a time when the very wealthy paid 70 percent, or even 92 percent, marginal rates on their last dollar. We can likely get back to, say, 40 without much bitterness if framed the right way.

  3. Brummagem Joe says:

    “So, I agree with Andrew both that those of us who have been relatively successful are going to have to pony up most of the bill and that the rhetoric of class warfare is not the right way to persuade us of that.”

    Actually I thought the main exponents of class warfare at the moment were the hard right with their constant talk of elitism and ivy league elitists. Of course in the next breath they demand that taxes should NOT be rise on this class of society. Of course the effective tax take has got to go back to the low to mid 20’s which is where it’s been for most of the years since the war. This is going to mean taking top marginal rates back to around 40% (not 70%) which is not exactly going to cripple the upper middle classes. Most members of the UMC (to which I belong) that I talk to are totally aware of this, as you are Jim. The only people who seem to think any other course practicable are Republican politicians.

  4. reid says:

    Are there really people who consciously choose to work less hard if their marginal tax rate goes from 35% to 39%, say? Other than people who do so out of spite or to make an ideological point. It seems awfully petty.

    I’m also not convinced about this premise:

    “Why are so many on the left incapable of acknowledging that many people who are rich – but, of course by no means all of them – earned it the hard way?”

    Where is the basis for that?

  5. […] James Joyner replies to our posts (mine and ED’s) about the liberal failure to acknowledge the greatness of our Galtian overlords: […]

  6. Tom Hilton says:

    Look: the only reason ‘wealth’ as such exists is that government decrees that it exists. Absent government, there is no ownership–only possession. That in itself should dictate that as a moral matter wealthy people owe a greater percentage of what they have than those who aren’t wealthy.

  7. Nightrider says:

    We just had this same discussion in separate thread a week or so ago. My biggest problem with the current “tax the rich” debate is that a lot it it seems to be “tax somebody else because I don’t want to pay for the services I demand.” If we want to keep on our profligate spending ways, everyone needs to pay more taxes. If the middle class can’t afford more taxes then it should come to terms with the fact that the US cannot afford its current military and Medicare.

  8. Brummagem Joe says:

    “Are there really people who consciously choose to work less hard if their marginal tax rate goes from 35% to 39%, say?”

    Such people only really exist in the minds of Republican spinmeisters and those who buy their spin. And they are preponderantly people who have never been in a 39% tax band nor are ever likely to be.

  9. Evan says:

    As long as we’re insisting people acknowledge things, why can’t conservatives acknowledge that most rich people weren’t born dirt poor. I am about in the middle of the heap, and I’m not here only by hard work. I got where I am because my parents had enough money to live in the suburbs with good schools, knew that I could start taking college classes when I was in high school, and had the money to send me to a $35k/year liberal arts college from which I graduated with no debt. I got my current job through my friend, who got his job through a friend, who got his job through a family member. We’re qualified for our respective positions, but without those social connections, we wouldn’t have our jobs. I’m only 26, so I hope I’ll make more money in the future, but if and when I get rich, I’m not going to go around insisting that I made it there purely through hard work. I got really really lucky to be born where, when, and to whom I was, and I’m reaping the benefits, and I’d be glad to pay for the privilege in the event I make it anywhere near the top.

  10. Brummagem Joe says:

    “If the middle class can’t afford more taxes then it should come to terms with the fact that the US cannot afford its current military and Medicare.”

    Actually it can with some relatively modest adjustments.

  11. Brummagem Joe says:

    Evan says:
    Monday, October 18, 2010 at 14:10

    “I’m not going to go around insisting that I made it there purely through hard work. ”

    You’re entirely right of course but never underestimate the Mr Bounderby factor.

  12. […] A Balloon Juice commenter would like to pleasure me in an unnatural way for my referring to taxation as “confiscation” in my posting “Taxing the Successful.” […]

  13. Alan says:

    What percentage of the “successful” people you want us to worship and grovel before actually started with nothing and became super-rich and did it all without every doing anything underhanded or fraudulent or even downright criminal? As opposed to those who were born into upper-middle class if not outright wealthy families that allowed them greater advantages in terms of education, up-bringing, networking, start-up capital and far too many other advantages to mention? Should I admire Don Blankenship of Massey Energy, whose lust for profits recently led to the death of 27 miners willing to work in unsafe conditions just to feed their families? He’s pretty successful!

    And if the estate tax makes you “squeamish” what sort of tax rate would you favor on lottery winnings, since there’s no real moral distinction between someone who bought a winning lottery ticket and someone with the good fortune to be born into a wealthy family? Unless, of course, you start with the premise that spoiled kids born into wealthy families are, by their birth, morally superior to poor people who buy lottery tickets out of desperation.

    But thank you for acknowledging that a permanent landed aristocracy might be bad for a republic. I’ll return the favor and say that it might also be a bad thing if angry mobs broke into the homes of the super-rich, chopped off their heads with a make-shift guillotine and seized their assets for the benefit of people who actually provide some productive benefit for the nation instead of those who are merely successful at lining their own pockets.

    Then again, it might not be such a bad thing after all.

  14. Nightrider says:

    >>>>Are there really people who consciously choose to work less hard if their marginal tax rate goes from 35% to 39%, say? Other than people who do so out of spite or to make an ideological point. It seems awfully petty.<<<<

    I work less because of taxes. But I don't do it our of spite or to make an ideological point, I do it because it just isn't worth losing more of my free time when I only get to keep half of what I make. I suppose I could decide to feel resentful of people who work half as much as I do and pay 1/10th the taxes complain about the rich not paying enough in taxes, or take offense that someone thinks I am being petty by working less because of taxes rates (which I don't think you necessarily mean). But I try not to decide which policies I favor based on resentment, now that would be petty.

  15. tim serbo says:

    so it’s not enough that the rich hog an increasingly large share of U.S. wealth? we peasants are now expected to tug our forelocks and thank our betters for doing such a wonderful job of hogging it? i will exercise massive self-restraint and say only, get bent, Joyner, and all who sail in you.

  16. michael reynolds says:

    Shall we also do away with the resentment rich people feel toward the poor they help to support? Because that seems a lot more prevalent to me than liberals resenting the wealthy.

    What’s being insisted on, here, is a relationship where the well-off are assumed to have a right to lecture, denigrate and resent the less well-off. And then whining that the poor don’t respect them for their “superiority.”

    Which by the way is the emotional core truth of the Dollars! wing of the GOP: Wealth and power joined to churlishness and self-pity.

  17. mantis says:

    I do it because it just isn’t worth losing more of my free time when I only get to keep half of what I make.

    Would you work less than you do now if there were a 3% increase to the top marginal rate, assuming that would even affect you?

  18. Brummagem Joe says:

    “I work less because of taxes.”

    Of course there’s always the exception that proves the rule. And I’m not sure how someone making say 300k a year loses half of what he makes when his tax bill rises by around 3% but I’m sure someone will explain it.

  19. Brummagem Joe says:

    “Which by the way is the emotional core truth of the Dollars! wing of the GOP: Wealth and power joined to churlishness and self-pity.”

    But Michael, all these guys were brought up in a ditch with a foot of water in it.

  20. TG Chicago says:

    To me, the most amazing thing is that Sullivan originally complained “Why are so many on the left incapable of acknowledging that many people who are rich – but, of course by no means all of them – earned it the hard way?”

    He did so in response to Jamelle Bouie saying:

    Simply put, wealth simply doesn’t enjoy a 1:1 relationship with success. Some people work hard for their wealth, but some are lucky, some have it handed to them, and others are ultimately capitalizing on advantages they gained at birth.

    So really, Sullivan was just complaining that Bouie said “Some people work hard” instead of “Many people work hard”. Wow, what a terrible injustice.

    Or is the real question we should be asking (to paraphrase Sullivan): Why are so many people on the right incapable of acknowledging that their tired old stereotypes and tropes about the left are clearly inaccurate?

  21. TG Chicago says:

    To me, the most amazing thing is that Sullivan originally complained “Why are so many on the left incapable of acknowledging that many people who are rich – but, of course by no means all of them – earned it the hard way?”

    He did so in response to Jamelle Bouie saying:

    Simply put, wealth simply doesn’t enjoy a 1:1 relationship with success. Some people work hard for their wealth, but some are lucky, some have it handed to them, and others are ultimately capitalizing on advantages they gained at birth.

    So really, Sullivan was just complaining that Bouie said “Some people work hard” instead of “Many people work hard”. Wow, what a terrible injustice.

    Or is the real question we should be asking (to paraphrase Sullivan): Why are so many people on the right incapable of acknowledging that their tired old stereotypes and tropes about the left are clearly inaccurate?

  22. michael reynolds says:

    By the way, the idea that wealth is simply “earned” is bullshit.

    It’s philosophically infantile to dismiss the role of DNA and environment and sheer, dumb luck and focus solely on free will. It’s like crediting a poker player as a genius when he’s dealt three aces.

    But then conservaives have an innate need to believe in their own specialness and to indulge their fantasies of being “self-made,” as though the entire world around them contributed nothing and they hacked their success out of a howling wilderness with their bare hands.

    Their bare hands and daddy’s money, or a high IQ, or the luck to be standing in the right place at the right time in a civilization that made wealth possible to begin with.

  23. John Personna says:

    We can’t cut spending and we shouldn’t tax the successful.

    What could possibly go wrong with that combo?

  24. Jules says:

    God, I am sick to death of the whining of the top 5% wage earners and their apologists/lackeys.
    whaaaaa, acknowledge how hard we worked to get here….
    whaaaaa, I might have to pay 4% more in taxes on income above $250,000 each year….

    I’d like an acknowledgment from the top 5% that a lot of the money they work so hard for comes from the hard work of people who are the other 95% that work their asses off producing so the guy who owns the company can send his kids to private schools, go on wonderful vacations, have a sweet retirement and get to spend their time sitting around bitching about how their taxes have to pay for policemen making $75,000 a year or to pay for “welfare”.

  25. Dwight says:

    I’m sure you like many others you have worked hard and so you get to reap what you sowed. Which is being proposed as 61 cents on the dollar above 250k instead of 65. However to ignore that society did anything to help many people get there is absurd. I know I don’t run in the most elite circles, but just about everyone I know who went to college, including you James, according to your mini-bio, went to a public school. I can’t think of anyone I know in upper or upper middle class that is not almost wholly dependent on the lower and middle class as customers to make their money.

    However if you insist on being so jealous of the tax burden of the peon at McDonald’s nothing is stopping you from applying at your nearest location.

  26. Mike Toreno says:

    “most high earners got there through the dint of their own efforts”

    The problem is, this is a lie. The highest incomes over the last decade or more have come from financial manipulation, in which the “work” that was done was to borrow money and not pay it back. Financial institutions booked huge phony profits, based on trading what were essentially tokens at higher and higher prices. This trading of tokens weakened, and in some cases destroyed, the financial institutions, but the people running the institutions received salary and bonuses based on the phony profits.

    An asset of a company is usually a debt owed to the company by someone else, and people running financial institutions were able to report large profits by amassing huge amounts of debt that was never actually going to be paid, while concealing the fact that this debt was never going to be paid.

    Another important source of profit, leading to high salaries for executives, is in the practice of health insurance companies stalling and refusing to pay legitimate claims. Such a practice allows insurance companies to profit by collecting money and not paying it back, but adds nothing to society. In fact, nearly all the cost of private health insurance administration is entirely wasted, and the people benefiting form this waste do not contribute to society.

    People who received high incomes from doing nothing of value do not deserve any accolades.

  27. Brummagem Joe says:

    michael reynolds says:
    Monday, October 18, 2010 at 14:30
    “By the way, the idea that wealth is simply “earned” is bullshit.”

    Can’t agree with this Michael. Wealth can be unearned or its accretion assisted by circumstances, of course but a lot of it is earned by hard work whether it’s passing bar exams or driving a backhoe. I’m afraid this is the analogy that is bs

    ” It’s like crediting a poker player as a genius when he’s dealt three aces.”

    Most “self made” people created their own luck in my experience. I would have thought you’re own personal circumstances would have told you that.

  28. John Personna says:

    You guys shouldn’t fall for the meta-argument, that taxing the wealthy or the successful is even optional. No country can make their budget work without them. As far as I know no one has built a budget that works with flat, non-progressive, tax.

    The non-rich and unsuccessful just don’t have the money to make it work.

    But heck, there is probably enough drama here for the drama queens of the rightosphere.

  29. binz says:

    Coming from guy who had a career in the Army it’s goddamn pathetic reading your whining rant about taxes.

    And taxes = confiscation? Scuze me, Professor? That’s class warfare rhetoric right there.

    Know what I resent? Privileged white guys who bitch about taxes who got a career, income, education and medical care and the resultant bootstrap up at success — all funded via taxes.

    You need to acknowledge that first before demanding acknowledgment of your victimhood.

  30. Jonathan says:

    Wow, that’s some very inside the beltway thinking.

    In the same argument you complain about the wealthy not being appreicated enough for the efforts to be wealthy, and then saying you’re not sure about the estate tax.

  31. reid says:

    “I work less because of taxes. But I don’t do it our of spite or to make an ideological point, I do it because it just isn’t worth losing more of my free time when I only get to keep half of what I make.”

    I can certainly understand working less to have more free time; I just took some leave without pay myself for a vacation, which is basically the same thing. As others have said, what I don’t understand is the indignation over the top rate going from 35% to 39% and suddenly deciding enough is enough. Particularly when even 39% is a historically low rate. If the jump was to 90% I would understand the attitude more.

  32. Brummagem Joe says:

    “Coming from guy who had a career in the Army it’s goddamn pathetic reading your whining rant about taxes.”

    From what I remember the army officer corps was something of an irony free zone. Not so enlisted men however.

  33. James Joyner says:

    @Michael Reynolds

    It’s philosophically infantile to dismiss the role of DNA and environment and sheer, dumb luck and focus solely on free will.

    Who’s doing that? Of course, it helps to have talent. And decent parents. And, certainly, some luck. Not everyone was lucky enough to be born with the skill sets necessary to create several wildly successful book series, or even to get a PhD at a state school and make a living writing about politics.

    At the same time, though, there are plenty of people who are smart enough to do those things who pissed it all away. Lots of people started on the path that you started on in early life and . . . stayed on it. Sure, you lucked on finding a women who kicked you in the ass and supplied some motivation. But I think you get some credit for your success.

    What’s being insisted on, here, is a relationship where the well-off are assumed to have a right to lecture, denigrate and resent the less well-off. And then whining that the poor don’t respect them for their “superiority.”

    Insisted by whom? I’m seconding Sullivan’s argument that the government needs to be paid for and that the well-off are naturally going to have to pay the lion’s share but that it would be helpful if politicians would refrain from berating the successful people in society why demanding we pay more.

  34. James Joyner says:

    Binz

    Coming from guy who had a career in the Army it’s goddamn pathetic reading your whining rant about taxes.

    I spent four years in the Army. But why does my volunteering for military service obligate me to support castigating the well off for having the temerity to complain about their rate of taxation?

    I support paying for a military with tax money. I also think we vastly over-spend on the military. Regardless, that doesn’t mean we can’t have a civil debate as to how it should be funded.

  35. michael reynolds says:

    Joe:

    Most “self made” people created their own luck in my experience. I would have thought you’re own personal circumstances would have told you that.

    On the contrary, my experience has taught me that life is DNA, environment, free will and random chance and that we live inside a Venn diagram of those elements.

    I have an IQ in the low 150’s — which I did not “earn.” I have innate talent with words which again, I did not “earn.” (High School drop-out, no particular love of literature, no classes in writing.) I had the enormous good luck of meeting my wife, which turned my life around. (A month before we met I was living under a freeway overpass in Austin, Texas, and I just happened to see her through a window. 10 seconds later, my life would have been very, very different.)

    Do I work hard? Yes. Did I work even harder when I was waiting tables? Yes. But somehow I now earn enough to bitch about high tax rates as opposed to low tips.

    Free will is a part of it, not all of it, or necessarily even the largest part. DNA, environment, free will and random chance are inextricably interwoven, and it’s not philosophically tenable to exclude any of them.

  36. ponce says:

    “it would be helpful if politicians would refrain from berating the successful people in society why demanding we pay more.”

    Why?

    Are the “wealthy” going refuse to pay their taxes because their feelings are hurt?

    Are the wealthy going to stop accusing any politicians who suggests raising taxes on the wealthy of engaging in “class warfare” and being a “Commie?”

  37. john personna says:

    I support paying for a military with tax money. I also think we vastly over-spend on the military. Regardless, that doesn’t mean we can’t have a civil debate as to how it should be funded.

    Is that what this is? Seriously?

    Why don’t you answer the Fiorina question then. If you want to keep tax rates for the rich and successful at historic lows, what are you going to cut?

  38. john personna says:

    “it would be helpful if politicians would refrain from berating the successful people in society why demanding we pay more.”

    Why?

    Are the “wealthy” going refuse to pay their taxes because their feelings are hurt?

    You’ve missed the meta-game.

    The Republicans have moved away from balanced budgets, now that they know what they mean.

    Now they avoid math, and it IS all about feelings.

  39. James Joyner says:

    @ponce

    Are the “wealthy” going refuse to pay their taxes because their feelings are hurt?

    Are the wealthy going to stop accusing any politicians who suggests raising taxes on the wealthy of engaging in “class warfare” and being a “Commie?”

    This is largely self-refuting. Within living memory, the very well off paid a whopping 92% top marginal rate. Within very recent memory, it was at 70%. That there’s near uprising over whether to allow a temporary cut of the 39% rate to 35% to expire would seem an indication that something’s gone horribly wrong in the way the debate’s being carried out.

    Some of it is from the Right, of course. But a large part of it is the populist rhetoric from the Left, which insists that the people who are successful in this country got that way through unjust means and that increases which “only affect the top 1% of earners” are okay because, after all, 99% of people aren’t affected by them breed resentment. It’s just a spectacularly stupid way of persuading people who are already paying most of the taxes to pay more.

  40. James Joyner says:

    Why don’t you answer the Fiorina question then. If you want to keep tax rates for the rich and successful at historic lows, what are you going to cut?

    It’s not my thread. I think we’ll have to have massive cuts in defense and entitlement spending, including means testing Social Security, and probably increase taxes. And I don’t think that’ll be enough absent a return of economic boom.

  41. john personna says:

    “not my thread” what about “not my country?”

    Seriously, you are spinning national policy here in a direction that simply does not work.

  42. john personna says:

    “I think we’ll have to have massive cuts in defense and entitlement spending, including means testing Social Security, and probably increase taxes. And I don’t think that’ll be enough absent a return of economic boom.”

    And you must admit that absent those, the accounting demands … ?

  43. James Joyner says:

    And you must admit that absent those, the accounting demands … ?

    In the near term, we wait it out. We’re not going to get any consensus on radically reshaping spending in the midst of a global recession. And we’re sure not going to tax ourselves to prosperity.

    Even if we managed to get defense spending to a rational level, interest on the debt and health care costs are going to kill us. And we’ve exacerbated that problem two successive administrations.

    But we’re on an unsustainable path, as is most of the developed world. We’re stingier than the Europeans, by far, but you just can’t provide decades of retirement benefits out of the public trough when people are only having one or two kids.

  44. ponce says:

    “Some of it is from the Right, of course.”

    The truly wealthy, like the lucky Walton offspring and the Koch brothers, wage well-funded wars around the clock against politicians who dare to suggest they might pay a few extra dollars out of their windfall.

    Maybe you should work on getting them to be more like Bill Gates if you really want to see this endless war resolved.

  45. michael reynolds says:

    James:

    At the same time, though, there are plenty of people who are smart enough to do those things who pissed it all away.

    Absolutely true. I know because I did my best to piss it away.

    But setting my own past imbecility aside, how would you propose to separate good choices and hard work from DNA and environment? Free will does not spring fully-fledged from the air. It is a product of DNA, environment and random chance. And for that matter, environment is likewise inextricably interwoven with DNA and free will and chance. And so on.

    The desire to credit free will as a sort of stand-alone virtue derives I think from a need to justify one’s own success, to feel a certain innate justice in the universe. It’s a part of what makes the idea of God so attractive, this notion that things not only “are” but are as they “should be.” But the universe has no sense of justice.

    I’m the exact same guy I was when I was cleaning homes and offices. I actually work less now. And make 10 times more. That’s not justice, that’s genes and experiences and randomness stirred in with my own choices.

  46. Brummagem Joe says:

    “I have an IQ in the low 150′s — which I did not “earn.” I have innate talent with words which again, I did not “earn.” (High School drop-out, no particular love of literature, no classes in writing.) I had the enormous good luck of meeting my wife, which turned my life around. (A month before we met I was living under a freeway overpass in Austin, Texas, and I just happened to see her through a window. 10 seconds later, my life would have been very, very different.)”

    On the other hand Michael I’ve know a few people who had all the talents and ended more or less on skid row, and others who were barely literate, came from pitiful circumstances and changed women like underpants, but ended up with considerable fortunes basically because they worked their balls off. You can have all talent in world but its application usually requires some effort to achieve success…and some dumb luck of course.

  47. john personna says:

    That was a pretty fair comment at 16:27 James, I mean given your reluctance to tell the long term story.

    As the recession ends we’ll either have to cut spending or raise taxes. If we stubbornly do neither, we’ll end up in a sovereign debt crisis. I’d hope it would just be a small one, but you never know.

    See also Herbert Stein’s Law, which he expressed as “If something cannot go on forever, it will stop.

  48. Dave Schuler says:

    I think that rather than arguing about abstractions it’s better to debate more concrete policy. I opposed the “Bush tax cuts&148; when they were enacted and, obviously, I have no problem with letting them lapse now. Are the rates that they represent confiscatory? I don’t think so.

  49. michael reynolds says:

    As for the idea that people when taxed work less.

    If I want to live well, I do what I need to do to maintain that life. If that means 40 hours or 45 hours or 50 hours, I do it.

    At some point the amount of time spent working becomes in itself a block to one’s enjoyment of a lifestyle, and then some will make compromises. Maybe work less.

    But on the other hand are people in my position who try to make up the difference with higher productivity.

    And then there are people so wealthy that there is no direct connection between income and lifestyle, and who see the accumulation of wealth as a sort of game or challenge. For those people it is illogical to imagine that they would work hard to go from one billion to two billion but throw up their hands in defeat at the prospect of going from one billion to one and three quarters billion.

    In other words, yeah, higher taxes might discourage some, but will spur others, and be irrelevant to many. Which may be why there seems to be no convincing evidence that taxes hurt productivity.

  50. Brummagem Joe says:

    “I think we’ll have to have massive cuts in defense and entitlement spending, including means testing Social Security, and probably increase taxes. And I don’t think that’ll be enough absent a return of economic boom.”

    Jim there aren’t going to be massive cuts. The federal budget is around $3.5 trillion whereas receipts are around $2.1 trillion. With the best will in the world and full party cooperation (lol) the best you can hope for out of this is maybe 10% or $350 billion with say $100 billion out of defense, $100 billion out of programs like ag subsidies and special tax breaks and $150 billon out of social programs. And this is going to involve a big effort. The other $750 billion assuming you want to run a modest deficit is going to have to come out of increased revenue by returning the tax take to Clinton levels and economic growth which means we desperately need to get the economy growing again but basically the Republicans are standing in the way of this.

  51. michael reynolds says:

    Dave:

    I disagree. Most of our problems flow from philosophical and especially epistemological confusion. It’s a good idea to discuss abstract principles.

  52. john personna says:

    I hope that’s irony michael.

    The problem is that everyone has stopped treating the budget as accounting and moved to metaphysics. They’ve started to believe it is a philosophical domain in which everyone’s answer is as good as anyone else’s.

    Got a trillion dollar shortfall … what does that mean? Discuss.

    What is it, post-modernism in action?

  53. binz says:

    @ James Joyner

    “it would be helpful if politicians would refrain from berating the successful people in society why demanding we pay more.”

    What the hell is this ‘successful people in society = wealthy’ bullshit you’re peddling, Joyner?

    There are millions of successful people who aren’t wealthy because, unlike you and whoever pays you to write that crap, they define success not by dollars but by other means.

    Was your mother wealthy? No? Then she was not a successful person in society, by your own yardstick. Nor any of your teachers, for that matter. Nor you, not likely when you were paid a professor’s salary.

    Which brings me to the implied other half of your world view, which is anyone who isn’t wealthy is a loser. That’s really the other side of what you’re pushing. It’s built right into it.

    And you wonder about class warfare and the resentments…of the rich? Irony free zone, indeed.

  54. john personna says:

    good rant, binz

  55. James Joyner says:

    @Michael Reynolds

    I’m the exact same guy I was when I was cleaning homes and offices. I actually work less now. And make 10 times more. That’s not justice, that’s genes and experiences and randomness stirred in with my own choices.

    Well, I’d argue that the reason that the exact same guy is making 10 times the income with less work is the choices. He had the genes and experiences whilst living under the freeway, after all.

    The problem is what to do with the other poor bastards living under overpasses who are some combination of stupid, crazy, and addicted. They’re unlikely to get book deals. Or, at least, a second book.

  56. Brummagem Joe says:

    ‘Which may be why there seems to be no convincing evidence that taxes hurt productivity.”

    Well there is some evidence Michael but it doesn’t start to happen until we get way beyond existing levels and the modest proposed shifts so in the context of this discussion it need hardly concern us.

  57. Mike Toreno says:

    Nightrider:

    “I work less because of taxes.”

    If the work you refrain from doing is something for which there is a need, plenty of people will step up to do it. If the work you refrain from doing wasn’t needed in the first place, who cares if you don’t do it.

    It’s a no-lose proposition for society. We can buy something with the money you pay in taxes, and we allocate work in a more efficient manner.

  58. Dave Schuler says:

    Michael:

    The reason that I think it’s counter-productive is that debating the principles invariably degenerates into a shouting match between those who think that taxes at any level are immoral and those who think that we should go back to the 91% top rate that prevailed before the tax cuts of the 1960s. Neither will happen. Indeed, while it’s possible that we might return to the 70% highest marginal rate that prevailed before the tax cuts of the 1980s, I think it’s pretty unlikely.

    Consequently, the entire discussion is one of where in the range between 35% (the “Bush tax cuts”) and 50% (the rate that prevailed for most of the Reagan Administration) we set the rates. There are no grand principles in that narrow range, just pragmatics. It’s not low enough to drown the government in the bathtub and it’s not high enough to reduce income inequality materially.

    We need to recognize that raising the top marginal rate will have the effect of reducing the total amount of economic activity. I think we can accept a small reduction in total economic activity to bring our fiscal house nearer sanity.

    This is where the value of Steve Verdon’s comment from the other post on taxes today comes in. Even if make major cuts in defense spending and raise the top marginal rate within the range above it won’t take us where we need to go. The other major expense items are Social Security and Medicare. To achieve anything resembling fiscal sanity we need to reduce them. That’s not a question of principle, it’s one of mathematics.

  59. binz says:

    “But why does my volunteering for military service obligate me to support castigating the well off for having the temerity to complain about their rate of taxation? ”

    Bwa-ha! “the well off having the temerity to complain” Oh, that’s good, very good!

    Why, you’re not defending the rich whiners crying about their historically low taxes after a decade of pocketing most of the nation’s income while everyone else got screwed. Nosiree, you’re nobly insisting we don’t ridicule and insult the wealthy who, in a time when everyone else is losing their jobs and homes and whose incomes less now than 10 years ago, are wailing about how unfair it is to pay in taxes 3 cents on every dollar beyond the first $250,000 they make.

    Your service obligates you in no way to make an ass of yourself but you’ve opted to do just that with your defense of the wealthy whiners.

  60. tom p says:

    James, wrong title to this post. It should be “Taxing the Lucky”.

    Hard work has nothing to do with getting wealthy. I know all kinds of people who work harder in one day than any desk jockey does in a week (I am one of them) and don’t make half the money they deserve. But this is America, just cause you work hard, doesn’t mean you get ahead…. We picked the wrong profession. Tuff sh*t. Get over it. Quit yer whining.

    Now, some desk jockey who makes $1,000,000 + per year without ever breaking a sweat has to pay a tax rate of 39% on what he makes OVER $250,000??? When he pays NO FICA on it? (!5% for the self employed, 7.5% for the others) a tax break I can only dream of???????

    Tuff sh*t. Get over it. Quit yer whining.

  61. michael reynolds says:

    John:
    The problem is that everyone has stopped treating the budget as accounting and moved to metaphysics. They’ve started to believe it is a philosophical domain in which everyone’s answer is as good as anyone else’s.

    Dave:
    That’s not a question of principle, it’s one of mathematics.

    The difficulty is in getting people to see that it’s a matter of accounting/mathematics. Why won’t they see things that way? Because their little heads are full of ideological stuffing. they hold to ideas that are at variance with reality.

    If we could correct those beliefs — surgery would probably work, but we’re limited to debate — then those who oppose a pragmatic approach on ideological/philosophical grounds would see the light and we boring pragmatists would be able to do something useful.

    You’re arguing that we’re hungry, we see a cow, and the logical thing is to eat the cow. Which makes perfect sense. Unless you’re surrounded by Hindus. In which case logic is irrelevant and you need a philosophical shift if we’re ever going to grill some steaks.

  62. Dave Schuler says:

    Not exactly. I’m arguing that we’re already committed to killing and eating the cow. That decision was made 200 years ago during George Washington’s administration. We’re arguing over whether to eat 35% of it or 50% of it.

  63. Brummagem Joe says:

    Dave Schuler says:
    Monday, October 18, 2010 at 17:15

    “This is where the value of Steve Verdon’s comment from the other post on taxes today comes in. Even if make major cuts in defense spending and raise the top marginal rate within the range above it won’t take us where we need to go. ”

    Well since Mr Verdon didn’t know what the Federal budget was for 2010 (he claimed my figure of $3.5 trillion was way to low when in fact it’s entirely correct) pardon my scepticism about his forecasts. If you make these changes along with some other modest adjustments in entitlements and GDP growth averages that of the last 50 years it does largely take care of the problem. These forecasts depend on so many variables notably growth it’s notoriously difficult to sort fact from fiction and inasmuch as they are all forecasts they are all fiction at this stage anyway.

  64. Brummagem Joe says:

    It would be great if all you guys arguing about taxes, money, federal budgets etc actually provided some numbers instead of talking about eating cows, whether the manual worker works harder than the brain worket, et al.

  65. Dave Schuler says:

    GDP growth averages that of the last 50 years

    Is there a reason to believe that will be the case? I think that demographics is working against us on that. I’m assuming a level of growth closer to what’s been seen in other developed countries, closer to 2%.

  66. michael reynolds says:

    Dave:

    You realize now I’m hungry for a steak.

  67. Brummagem Joe says:

    Dave Schuler says:
    Monday, October 18, 2010 at 21:18
    GDP growth averages that of the last 50 years

    “‘Is there a reason to believe that will be the case?I think that demographics is working against us on that.”

    In 50 years time the population of this country is forecast to be nearly 450 million people. And our growth rates are going to be the same as Europe whose population is basically static? You couldn’t be more wrong.

  68. Brummagem Joe says:

    Dave Schuler says:
    Monday, October 18, 2010 at 21:18

    From the census:

    “The U.S. has nearly 305 million people today. The new census projection is US population to hit 400 million in 2039 and 439 million in 2050.”

  69. Nightrider says:

    >>>>Would you work less than you do now if there were a 3% increase to the top marginal rate, assuming that would even affect you?<<<>>>Of course there’s always the exception that proves the rule. And I’m not sure how someone making say 300k a year loses half of what he makes when his tax bill rises by around 3% but I’m sure someone will explain it.<<<>>>I can certainly understand working less to have more free time; I just took some leave without pay myself for a vacation, which is basically the same thing. As others have said, what I don’t understand is the indignation over the top rate going from 35% to 39% and suddenly deciding enough is enough. Particularly when even 39% is a historically low rate. If the jump was to 90% I would understand the attitude more.<<<>>If the work you refrain from doing is something for which there is a need, plenty of people will step up to do it. If the work you refrain from doing wasn’t needed in the first place, who cares if you don’t do it. It’s a no-lose proposition for society. We can buy something with the money you pay in taxes, and we allocate work in a more efficient manner.<<<
    I think this is mostly correct. I do have certain unique talents and some of what I don’t do just doesn’t happen. But society will get by just fine, surely more so than if it didn’t collect sufficient taxes.

    Regarding the comparison to pre-1986 tax rates, weren't there a lot more tax breaks and shelters then?

    What certainly could tick me off is the notion it is inherently necessary to progressive taxation and fairness that the tax rates increase with higher incomes. People at higher incomes would still pay much more in taxes even if their top marginal rate was lower. If I pay $150,000 in taxes that is much more than the guy next door paying $25,000 in taxes no matter what our comparative rates are. Certainly there should be progressivism that I pay more than him, but when he doesn't want to pay $1000 more and think it is "unfair" if I don't pay $35,000 more and that I am stealing from him if I don't, well, that could be pretty annoying. I could get even more ticked with the idea above that just because some people who have high incomes get it by financial manipulation that doesn't contribute to the economy that that is how all of us get there. But I can live with that. I just think it is bad for our long-term economic prospects that just like with their credit cards and everything else, the middle class (which I still consider myself a part of, since my high income just started a few years ago and I don't have massive wealth) doesn't have the responsibility to assure that the citizens actually pay for the government we demand. Because I don't understand the comment that we can afford the Medicare and the military we have and pay off the debt and run a balanced budget and not raise taxes on the middle class and everyone else. Sounds like voodoo economics to me.

  70. Davebo says:

    James has a lot to answer for here.

    Seriously James, do you employ a CPA to manage your finances both from your employment, writings, and ad revenue from this website?

    I’m certainly hoping you do as that would be the only wise course.

    So, in which tax year have you paid in excess of $10,000.00 in tax liability from these alternate sources of revenue? In which tax year have you had income in excess of $100,000.00 from said sources of revenue? Speaking engagements, published writings, basically any revenue not provided from the Atlantic Council which I assume is your primary source of income but correct me if I’m wrong.

    You speak today of your positive financial circumstances as a badge of honor and our unwillingness to properly support you and your heavy tax liability as you cut checks to save our society.

    Since you’ve made this an issue lets lay it out on the table. Does this obviously burdensome to you tax liability come from the Atlantic Council, your published writings, or your ad revenue from OTB? I’m guessing it’s a combination of all three plus more but feel free to correct me.

    Of this income, what exactly, to use your own words, does this sacrifice entail? Have you been forced to sacrifice your own principals for those that fund your writing endeavors? Or is the sacrifice you’ve made through your work involved principals you may have once believed in?

    Have you ever read the Hitchhikers Guide to the Galaxy Trilogy? Because let’s face it James, you’re on the spaceship with the hairdressers and Insurance salesmen. Your entire existence is based on the occasional piece submitted to the Atlantic and you’re never ending train of thought lines here which I think we both know is the real money maker.

    And yet, despite your basic zero contributions to our society you feel you deserve what exactly?

    Spare me. Seriously. You live in a growth industry of no real production. Those who comment here I’m sure have to produce something of value to make their mortgage and utility payments.

    You? Not so much. Ever the pragmatist, you seem to ignore the reality that most Americans deal with on a daily basis.

    Why? Because you don’t have to. Just continue playing the middle man, the last of the true conservatives (which I give you credit for).

    Lord help us if your tax liability rises by 4% for every dollar you “earn” over $250,000.00. Hell, that might force you to …..

    Never mind.

    When was the last fiscal year in which The Atlantic actually turned a profit? And who subsidizes your rather sweet situation?

    You know the answers to these questions. Why not share while you are whining about how a person who has figured out a way to make substantial income off of a losing proposition is demonized by the tax code.

  71. michael reynolds says:

    Davebo:

    And yet, despite your basic zero contributions to our society you feel you deserve what exactly?

    Way out of line. You hold ideas and their development to be zero contributions? You are of course free to dislike Joyner’s writing, but you’re going past that to conclude that writing itself is worthless. Do I really need to start listing writers and what they’ve contributed to society?

  72. James Joyner says:

    @Davebod:

    What Michael Reynolds said. And, regardless of whether you think my work for the Atlantic Council, OTB, and as a freelance writer is of any value to society, the market thinks it of some reasonable value. Not as much as Reynolds’ books, much less that of an elite athlete, but enough to place me in the top 5% or so.

    Beyond that: The premise of this piece and its companion is that I’m willing to pay a higher share of my income, given that there’s no viable alternative. My only point — which your comment perfectly demonstrates — is that it’s not helpful in convincing high earners that they need to pitch in more to constantly excoriate them for how unfair it is that they’ve managed to earn more money than most.

    Oh, and I have next to nothing to do with the Atlantic, if by which you mean the Atlantic Monthly magazine and its web properties.

  73. Brummagem Joe says:

    Nightrider says:
    Monday, October 18, 2010 at 22:23

    “What certainly could tick me off is the notion it is inherently necessary to progressive taxation and fairness that the tax rates increase with higher incomes.”

    Well because there are lots of good reasons for this notion which I’ll tell you when you explain how a 3% increase in the tax bill of someone making around 300k takes away half of what they earn as you claimed.

  74. Brummagem Joe says:

    James Joyner says:
    Tuesday, October 19, 2010 at 07:51

    Jim: I agree Davebod’s comments are perhaps ill judged but really all these crocodile tears about the share of taxes paid by the rich is a bit silly. I actually have a lot of sympathy with your personal position because in tax terms it’s much the same as mine. We’re very comfortably off, have some toys and quite nice homes but we don’t have 8 million dollar apartments on Park, second homes in the Hamptons, 150 foot yachts (mine is a 28 foot Alerion) etc etc. But as a percentage of income we’re probably carrying the largest part of the burden. Now you’re self employed and maybe organised as an S corp so you have more flexibility than say the mid level lawyer or doctor who is on someones payroll. I don’t think we should be increasing the tax burden on the middle and working classes who are in a real squeeze but something has to be done about those in the top 1% if for no other reason than as Willie Sutton said “that’s where the money is.”

  75. john personna says:

    Beyond that: The premise of this piece and its companion is that I’m willing to pay a higher share of my income, given that there’s no viable alternative. My only point — which your comment perfectly demonstrates — is that it’s not helpful in convincing high earners that they need to pitch in more to constantly excoriate them for how unfair it is that they’ve managed to earn more money than most.

    Maybe you were conflicted, because you couldn’t write a post that was straight up about that need and there being no alternative.

    Instead, this fell in line with that old line Republican zeitgeist – taxes aren’t fair, at any level, but especially for “me.”

  76. Nightrider says:

    “What certainly could tick me off is the notion it is inherently necessary to progressive taxation and fairness that the tax rates increase with higher incomes.” Well because there are lots of good reasons for this notion which I’ll tell you when you explain how a 3% increase in the tax bill of someone making around 300k takes away half of what they earn as you claimed.

    Rats, that is two times in two days that this board did not post everything I wrote when I pasted it in. Wonder what’s up with that? Anyway, I did answer this but the website doesn’t show it. I never said the tax increase would take half my income; I was referring to all taxation (state and federal, AMT, self-employment, and a hefty amount of tax I pay on supposed “income” in amounts my business spends on feeding and entertaining clients. It may well be a fair amount less than half, but it is plenty enough to make me work less, which, as I have already said, is no great loss for the economy because someone else ends up getting more work.

  77. john personna says:

    Nightrider, I’ve often worked 1099, and paid quarterly taxes. In those days I use “half” as my mental benchmark for how much I’d have to save, to pay taxes and come out ahead.

    FWIW, it never stopped me from working.

  78. Brummagem Joe says:

    Nightrider says:
    Tuesday, October 19, 2010 at 10:08.

    “I never said the tax increase would take half my income”

    So what was the implication of this then?

    Nightrider says:
    Monday, October 18, 2010 at 14:18
    “I work less because of taxes….. I do it because it just isn’t worth losing more of my free time when I only get to keep half of what I make.”

    And as for the following, since when did business expenses become part of your federal tax bill not to mention everything but the kitchen you’ve also thrown in there. It’s this sort of casuistry that denudes your arguments of any cred.

    I was referring to all taxation (state and federal, AMT, self-employment, and a hefty amount of tax I pay on supposed “income” in amounts my business spends on feeding and entertaining clients.

  79. john personna says:

    I guess the thing that some of us are saying is that if you feel you have enough, feel secure enough, have other interesting things to do, that you can walk away at the margin …. that’s a win, not a failure.

    In a failed society you’d have an empty bank account, a go-nowhere job, and no options.

  80. john personna says:

    I mean really, you are mad at society because you have the option not to work?

    If you’d rather have more cars and less free time, you still have that option. Though, if you are at max rate, you probably have some nice cars already.

  81. Mike Toreno says:

    Jim, where does the Atlantic Council get money from? Is it a moneymaking enterprise? And the freelance writing you do, do you sell it mostly to moneymaking enterprises?

  82. Brummagem Joe says:

    “I’ve often worked 1099, and paid quarterly taxes. In those days I use “half” as my mental benchmark for how much I’d have to save, to pay taxes and come out ahead.”

    Well JP I’d say you probably always came out ahead unless you got some huge balloon payments and I’m sure you’d have managed it better than that.

  83. James Joyner says:

    @John Personna:

    Maybe you were conflicted, because you couldn’t write a post that was straight up about that need and there being no alternative.

    Well, the two sentence summary of the post on the front page was “High earners are going to have to pay more than our fair share of the costs of government to make things work. But how we frame the debate matters.”

    And the first substantive paragraph in the post, once I got the setup out of the way, was:

    High earners are going to have to pay more than our fair share of the costs of government to make things work. But how we frame the debate matters.

    And I’ve written the longer version of that post quite a few times already.

  84. John Personna says:

    Yeah, “more than our fair share” came through loud and clear.

  85. James Joyner says:

    Yeah, “more than our fair share” came through loud and clear.

    In my ideal world, we’d tax consumption — or even income — at a flat rate, with some generous credits for dependents or necessities (depending on the system). The “fair share” of someone earning a million dollars a year would be ten times that of someone making $100k and a hundred times those making $10k. But, while that would be fair, we can’t raise enough money that way.

  86. John Personna says:

    I guess I have lower ego, because I’m willing to accept a broad range of taxes and spending, as long as they balance over time. I could be happy in Singapore, or Canada. If one has low tax and the other high, that’s fine. Both societies work. What’s fair is what pays the bills for the services the voters decide to have.

    It’s just a tragedy that here “fairness” has become disconnected from bill-paying, to the point that you are saying you are willing to help pay this two-party, democratically conceived, debt … but it isn’t “fair.”

  87. Mike Toreno says:

    “The “fair share” of someone earning a million dollars a year would be ten times that of someone making $100k and a hundred times those making $10k.”

    No it wouldn’t.

  88. Nightrider says:

    —–“I never said the tax increase would take half my income” So what was the implication of this then?“I never said the tax increase would take half my income” ——

    Jeez, how many times do I have to say that I didn’t draw any policy conclusions. The question was asked “does anyone really work less because of taxes” and I answered it yes. I didn’t say, therefore we should lower taxes. I actually said we should raise them, probably on everyone.

    —-since when did business expenses become part of your federal tax bill not to mention everything but the kitchen you’ve also thrown in there. It’s this sort of casuistry that denudes your arguments of any cred.——

    Since the IRS includes these things in income, that’s when. My work income line of my 1040 ends up about 10% higher than I actually get in cash, because the IRS thinks that I get a taxable benefit from the meals and entertainment we provide clients, sports tickets, etc. They are considered non-deductible expenses. Anyway, I wasn’t even making an “argument” that could be discredited by my facts — that are, in any event, true. And AMT and state taxes are hardly the “kitchen [sink]”.

  89. Brummagem Joe says:

    John Personna says:
    Tuesday, October 19, 2010 at 13:35

    Looks like the foreclosure express is on the move again!

    http://www.nytimes.com/2010/10/19/business/19mortgage.html?th&emc=th

  90. Brummagem Joe says:

    Nightrider says:
    Tuesday, October 19, 2010 at 15:15

    “And AMT and state taxes are hardly the “kitchen [sink]“.”

    I thought AMT was essentially an either/or (to be honest I’m not too familiar with it) and when you’re calculating your FEDERAL tax liability yes I’d say state taxes count as the kitchen.

  91. Brummagem Joe says:

    James Joyner says:
    Tuesday, October 19, 2010 at 13:20
    Yeah, “more than our fair share” came through loud and clear.

    “In my ideal world, we’d tax consumption…But, while that would be fair, we can’t raise enough money that way.”

    Which is why the whole idea is ludicrous given the income inequalities we’ve allowed to creep into the system. I once attended a conference along with my CFO where Forbes was expounding his theories and my colleague (who was good Minnesotan Republican) was falling off his chair laughing. But he clapped along with the rest of us at the end.

  92. John Personna says:

    Too early to know if the “express” is running. The way I read it so far is that the banks realized they needed to show motion.

  93. Brummagem Joe says:

    John Personna says:
    Tuesday, October 19, 2010 at 16:34
    “Too early to know if the “express” is running. The way I read it so far is that the banks realized they needed to show motion.”

    Indeed? I thought according to you and Mr Ritholz any motion was impossible because all foreclosures were screwed up by title problems? This is all baloney then?

    “Bank of America, the nation’s largest bank and the servicer of roughly one in five American mortgages, insisted that it had not found a single example where a foreclosure proceeding was brought in error. “

  94. The Q says:

    Boys, many fine arguments here…keep up the good commenting.

    I can see it both ways….do I think liberals denigrate a little too much the hard work it takes to accumulate wealth… I must answer yes….(now as my previous comments will attest, I am a New Deal, fu%^ck the rich Democrat) but I do have many friends who are rich and who work very hard for their money.

    I just sold a web domain for $50k to a Hong Kong company. Was my windfall due to my singular brilliance…yes of course….was I friggin’ lucky as crap…yes of course…

    Would I have been able to make this money by myself? F#$uck no. Why not? Because. It so happens that there are laws and intellectual property rights which are enforced by courts, governments, treaties etc.

    If left to the idiotically myopic right and their love of the free market, I wouldn’t have any such protection because who would pay for it? It would be easy for this Hong Kong company to just use my domain if I didn’t have ICAAN etc to protect me and the ability to punitively go after those who infringe on my rights.

    So a courthouse, judges, enforceable laws greatly impacted my own individual effort to “make money”.

    But this assumes a bit of compromise and cooperation on the part of participants so as to give up some sovereignty to do whatever the “hell I want” (i.e. Chinese counter fitters) in order to observe some set of laws which keeps us from economic anarchy – or a as I call it – a Republican wet dream.

    So, no way can I make $50K on some stupid domain (which took about 10 minutes to think up and 10 minutes to register on Go daddy and the 80 bucks its cost me over the last 6 years to keep it registered and lawfully my own) – if not for the stupid government and the fear my buyer had in following these regulations, lest I sue him for many more dollars than he offered to me.

    Without the legal backup, my domain would have been used illegally with little hope of punishment to the usurpers.

    Hence, the foolishness of conservatives who see nothing of the contributions of society to the individuals gain.

    It is absolutely maddening that the New Deal which really created the modern middle class, has been subjected to ruin by the brain dead right, with grave consequences.

    When that twit Reagan declared war on government, the results were predictable.

    30 years of conservative hegemony has gotten us to the point that liberals could well foresee viz. a widening gap of income inequality and coarseness to public debate.

    And now some of you idiots, want to do the “tax cuts to rich people thing” again.

    For the freaking third time….reagan, bush and now again?…why do you think the left is so pissed?

  95. john personna says:

    Joe, you can read Ritholtz compendium here:

    http://www.ritholtz.com/blog/2010/10/banks-hit-back-linkfest/

    I’m saying this one is too early to call, but interesting to watch.

    I think we can safely say that demands that BofA accept put-backs may have something to do with them restarting foreclosures. What will come out in the wash is how many they are actually restarting, and if they can really deflect the bondholder demands.

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