Equal pay for equal work? Even monkeys want that. Do not miss this quick video.
It gets more complicated when you get to the tax code. What’s the “fair” tax a billionaire’s estate should pay? Today’s Republicans say: zero. Today’s Democrats (and yesterday’s Republicans): half. There’s no “right” answer, though it seems reasonable to assert that taxes should be levied in ways that will cause the least hardship and the least economic disincentive. What billionheir ever suffered hardship by inheriting just $200 million, say, instead of the $400 million he and each of his siblings would have gotten had there not been a 50% estate tax? And what billionaire was ever disincentivized by the estate tax rate? He could still leave it all untaxed to his spouse (if heterosexual); he could still leave it all untaxed to a charity (and have the hospital wing named after him). Are you telling me that, knowing each kid would have to make do with less would diminish his incentive to grow richer? It’s such a ridiculous notion I’m having trouble explaining it clearly. Like the reason billionaires keep trying to get richer isn’t the excitement and fulfillment of building great enterprises or the mega-yachts and private jets they can command or scholarships they can endow — or the sheer competitive ego of it — but, rather, their intense need to be sure that someday each of their children inherits $400 million after tax instead of $200 million? Seriously?
So, yes, it’s fine to exempt the first $5 million from estate tax, as we do now, which makes it a non-issue for almost everyone. And it’s fine, I guess, to have the “by-pass trusts” that virtually all wealthy married people use to double that exemption to $10 million. And reasonable people can disagree on how fast the tax on estates beyond the exemption should rise to the top bracket, and whether that bracket should be 45%, as now, or 55%, as before — but that it should be zero? On multi-billion dollar estates? This is wrong on so many levels — not least as it would allocate yet more precious capital to stewards who may have little or no training or aptitude for that stewardship — how can the Republican Party possibly argue for it? Is the goal truly to complete our transition from a democracy to a plutocracy?
Which brings me to . . .
On income tax, the Republican line is that they’re now open to raising revenue . . . but only by closing what they describe as loopholes. They can’t abide having the portion of your income that exceeds $250,000 taxed at the Clinton/Gore rate (or the Reagan rate on dividends and capital gains). Instead, the Republicans have begun talking about capping allowable deductions at $25,000 or $50,000. It’s a flawed idea, but more than that it’s missing the point.
It’s a flawed idea because it would hurt charities. Where today it might cost just $650,000 to make a $1 million gift (because of the value of the tax deduction), tomorrow it would cost the full $1 million. The more it costs to do something, the less that thing gets done.
It’s a flawed idea because it would disproportionately burden high-income tax states like New York and California (coincidentally: heavily Democratic) while leaving untouched residents of no-income states (like Texas, which provides the most Republican Electoral College votes). Affluent New Yorkers and Californians who might now be paying $100,000 in state taxes, but at least getting to deduct that from their federally taxable income, would now have an even heavier lift while leaving Texans relatively unscathed. Unfair.
It’s also a flawed idea because it wouldn’t raise nearly enough money.
But flaws aside, it’s missing this point (or maybe I should say its critics seem to be missing this point): it doesn’t affect the truly wealthy. If you’re a New Yorker making $600,000 a year and struggling to put three kids through private school, it would pinch. But if you’re the Koch brothers, or Sheldon Adelson — not the “top 1%” but (say) the top 1,000 families in the country — the Citizens United crowd — what do you care that the mortgage deduction is capped? You haven’t taken out a mortgage in 30 years! What do you care that the value of your employer-provided health insurance benefit is taxed? A pittance! Losing the deduction for state income tax? If you haven’t already, you’ll move to a no-tax state. Charity? Well, so you’ll just give less (and blame it on the Democrats).
I say again: do not miss this quick video. What’s going on in Washington these days is all about the cucumbers and the grapes.
If you can’t make bricks without straw (which from watching “The Ten Commandments” I know that you can’t) neither can you make WheelTug systems without wheels. Hence the importance of this announcement yesterday, wherein a division of $12 billion Parker-Hannifin has agreed to join the WheelTug effort.
Michael Walasinski, Managing Director of Aircraft Wheel and Brake, says, “We have worked with WheelTug’s team on this project for most of 2012. We are excited about the scale of the business opportunity, the technical expertise of the WheelTug partners, and our positive working relationship.”
(Readers new to this page should be warned that I am obsessed with a company called Borealis that owns most of a company called Chorus Motors that owns most of a company called WheelTug. )
Quote of the Day
Very few American investors buy any stock for the sake of something which is going to happen more than six months hence, even though its probability is exceedingly high; and it is out of taking advantage of this psychological peculiarity of theirs that most money is made.~John Maynard Keynes
Request email delivery