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| 2008/7/23-28 [Reference/Tax, Finance/Shopping] UID:50661 Activity:high |
7/23 So tom, how does it feel to be rich? You're in the top 10% you know.
http://online.wsj.com/article/SB121659695380368965.html
\_ Where are the numbers for all the other taxes we pay, like
payroll, sales, etc? Oh yeah, just ignore all the facts that
don't advance your pro-inherited wealth ideology.
\_ So, how does it feel to be an anonymous coward? -tom
\_ I'm not pro-tax by any means, but isn't it pathetic that the
top 1% of the country earns double what the bottom 50% does? It
would not necessarily be positive even if the chart showed the top
1% paying 99% of the taxes if they also earn 99% of the income
leaving the other 99% to fight over crumbs. Also, I'd like to see a
similar chart which shows after-tax income.
\_ Why is it pathetic?
\_ No! The standard of living has improved for every segment
\_ You think this is a Good Thing?
\_ No. I just don't find it very surprising. The bottom 50%
are economically rather useless. Supply and demand...
why would a single diamond be worth more than a ton of
normal rocks?
\_ I have more respect more American workers than that.
I could see if you said bottom 10%, but bottom HALF?
\_ Everyone in the bottom half is "below average".
And "average" isn't very good in this country
(or any other country, really). I'm not saying
they're worthless. But they aren't rare snowflakes
and they're probably not even trying that hard to
improve themselves, as long as they have their
food + home + sex.
\_ I actually think American workers have a
strong work ethic and are among the best in
the world. It's interesting that when foreign
management employs US workers they can
achieve amazing results that US management cannot.
I am not prepared to write-off millions of US
workers. Those workers made us the economic
engine we are today and by continually
outsourcing, placing low expectations on them, and
taking advantage of them, we are getting what we
deserve. I'd rather have 10 poorly educated
American workers with a work ethic over 10
over-educated Europeans workers who whine all
the time and expect lots of time off. BTW,
average and median are two different things.
I am not sure that 50% of US workers are
actually "below average".
\_ Spoken like a dumb patriot.
\_ Spoken like someone who knows how hard
Americans work. Check out average
work-weeks.
\_ They are the bottom 50% lowest paid people.
Why do you think they have a strong work
ethic? Who knows what they do? Anyway,
there may be a lot of part time workers in
those statistics -- part time working parents,
or school kids with jobs. The top 50%
makes 88% and 12% for the bottom.
Without more data to go on, I don't see a
reason to get too excited. And I'm not
going to do a bunch of research right now.
\_ 1. I've actually been in the workplace
and seen that salary does not
correlate to work ethic
2. Just look at the statistics for
number of hours worked per week
3. If you don't see a problem with half
the country making 12% of the income
then there's no hope for you anyway.
You got yours, right?
\_ 1. Work ethic isn't good enough. You
can work hard but if you're stupid
or otherwise not valuable it does
not mean jack. There are billions
of people on Earth and merely
working N hours isn't very valuable.
\_ I beg to differ. If you're willing
to work hard there's a lot of
inherent value in that even if
you're stupid. Someone has to
build roads, harvest crops, work
the cash register, and so on.
\_ But anybody can work that cash
register. That's the point.
There is no scarcity of bodies
willing to do unskilled work
for a few bucks. Therefore
the value is low. Supply and
demand.
\_ Anybody can work it. Not
everyone has the work
ethic to show up on time
and do it for 8 hours
per day 250 days per year.
You can't say "well that's
without value". It is wasting
\_ If it had real value it
wouldn't be underpaid. duh
\_ You don't really
believe this do you?
The price pressures are
external to the US
markets. Think of
how much $$$ we could
save by outsourcing our
management for
lower-paid foreign
management instead
of saying that a
person making $9/hour
is overpaid because
someone in India can do
the job for $1/hour.
We could save more
by cutting that 88%
of earners versus
putting more pressure
on the 12% half.
\_ The companies are
run/owned by these
88%. You can't cut
them. The entire
point is they are
not drones being
told what to do by
somebody higher up.
They are the top.
Responsibility.
What world do you live in
which is full of fuckups
who can't even show up
to an easy job? Working
\_ The real world. I
can tell you never
managed low-level
employees before.
the Safeway cash register
is air conditioned and
they can take breaks.
You don't need one person
to do it 250 days a year
either, there are shifts.
\_ You need *someone*
there 250 days per year
when they say they
are going to be there.
Compare to Europe where
such employees make
more to do less.
\_ Why Europe? Try
a country without
a generous benefits
which make work
effectively
unnecessary.
a valuable resource in a
menial task that could be
doing something less menial
if big business realized it
and took advantage of
it. This is what US
management overlooks and
foreign management does not.
They know how valuable it is,
because they don't have that.
Addendum: Have you noticed
that as salaries have fallen
(due to global competition
and outsourcing) that jobs
that "anyone can do" are
being done poorly? I had to
call AT&T and I was ready to
praise God when I finally was
transferred to a CSR in
Atlanta versus an "anyone" in
India and the Philippines.
But supposedly this American
is overpaid and needs to
be outsourced when earning
her share of 12% of the
income in the country. BS.
\_ No I haven't noticed
that. AT&T does not give
a shit about CSRs because
you're still their
customer and their
competition also has crap
CSRs. I pick low price vs
good CSRs every time. You
should pay extra for your
precious CSRs. Also: you
are assuming that CSR is
bottom 50% -- unfounded.
But hey, they need no
education and only need
to be able to communicate.
You have a weird worldview
if you think that alone
deserves top-50% income.
\_ It doesn't deserve
top-50% income.
What it deserves
is more than 12%
of the pie.
\_ Why? They mostly
are living just
fine, and better
than billions.
2. see above
3. It's not half the country, it's half
the income tax filers. Did you go
to school? I don't remember everyone
having a strong work ethic. We're in
a globalized economy where people's
simple jobs of the past are more
cheaply done by foreigners who are
cheaper and more motivated. That said
most people in this country still live
very well even with low wages.
\_ So your argument is that there
are a lot of retirees and students
skewing the statistics? I find that
hard to believe. Regardless, those
people need to survive, too.
Just because someone is retired
doesn't mean their income can go to
zero.
\_ We haven't talked about their
income going to 0. We've talked
about their share of the income
pie. The pie is pretty huge.
\_ All the more disgusting that
the top 5% get most of it.
\_ They create most of it.
\_ You don't really
believe that do you?
Are they valuable?
Yes. Are they
generating value-added
commensurate with
income? No. How many
CEOs rake in millions
while their companies
(and share price) go
into the toilet?
http://tinyurl.com/8n8ro
I would argue McNealy
gets a pass for what
he's done for the
company, but maybe
not. Do companies pay
for past success or
present results?
\_ But look at the
long term growth.
Long term economic
growth is phenomenal
and all the drones
benefit from this.
The drones do not benefit from _/
this. The average wage for American
workers has not gone up since
the 70s. For workers with no
college degree, it has actually
gone down.
\_ I don't think wages tell the whole story. Would you
rather live with an average wage in an average town
in 1975 or now?
Does that wage figure include "supplemental
compensation" like health insurance, retirement
plans, and social security payments made by
employers? Or the quality of health care? Or
technological advancements such as cell phones
and PCs?
This report is interesting:
http://www.bea.gov/scb/pdf/2008/07%20July/D-Pages/0708dpg_d.pdf
Check out "Supplements to wages and salaries" as a
percentage of national income.
And consider:
Population went from 200M to 300M since 1970,
and the global economy is much more competitive.
\_ The gains have almost entirely gone to the top:
http://elsa.berkeley.edu/~saez/saez-UStopincomes-2006prel.pdf
Look at the chart labled "Real Annual Income
Growth by Groups" I don't think that increases
in the cost of health insurance really should be
considered as increases in the standard of
living, though perhaps I would feel differently
if I was in bad health.
\_ Well, ok. But the population size has grown
tremendously and a huge number are foreign
born. The economy has accommodated them
and still grown. By 2050, 1 in 5 of the US
population is projected to be hispanic.
This part is interesting:
"The evidence suggests that top incomes
earners today are not "rentiers" deriving
their incomes from past wealth but rather are
"working rich," highly paid employees or new
entrepreneurs"
Massive immigration and global competition
depressed wage growth for the lower groups.
Jobs that are more independent of this type
of competition see big gains, like doctors.
The best thing for the lower classes here
would be to improve conditions in Mexico
and have a lower population growth there.
I guess this brings us back to the
global inequality/barbarians in Rome theory.
\_ I am in agreement with you.
\_ No! The standard of living has improved in every segment
of wealth and it's none of your business to implement
progressive tax, that's COMMUNISM!!! -libertarian
\_ I said I'm not pro-tax. I don't necessarily think raising
taxes solves any problems. It just seems to make
government larger. It doesn't really help anyone.
However, what other ways can we address this inequality?
\_ Inequality has never been a problem throughout the
history of empires. The Roman emperors knew that long
time ago. As long as the populace has bread (beer+pizza)
and circus (football, plasma), there will never be
issues for the governing party.
\_ So how did that whole Rome thing work out for them?
\_ It worked quite well for a very, very long time.
The US is a young nation in comparison.
\_ How can you say inequality was not a problem with
a straight face when it caused the entire
Western civilization to collapse into
centuries of Dark Ages?
\_ My point is as long as people have bread
and circuses there will not be a problem.
panem et circenses.
\_ My point is that your point is wrong,
because Rome fell and set the world
back at least 500 years, if not more,
as a result. So clearly there were some
problems.
\_ Your notion that Rome's fall was the
fault just of "inequality" is silly.
There was no one single thing. There
were huge tribal migrations, plagues,
climate changes (hey hey), cultural
turbulence with Christianity and then
Islam etc. Rome kept going in the east
anyway... if the world was set back
then that probably goes back to the
fall of the Republic and onset of
Christianity.
\_ Especially since early Rome was not
especially egalitarian, with slaves,
very restricted citizenship rights,
etc., but it flourished just fine.
\_ Actually, inequality was probably
the greatest contributor. Why?
Because the barbarians wanted
what Rome had and because Rome
consumed more resources than it
could honestly produce sustainably
except through conquest (sound
familiar?). It was only late
in the game that the Romans
started to grant citizenship
to foreigners in an effort to
prevent a total collapse as it
became more and more difficult
to defend the far-flung Empire
from people ticked off at their
inequitable treatment so that
wealthy Romans could have
gold-plated toilets. Inequality
here doesn't refer to classes
within Roman citizenry as much as
it does inequality between Romans
and the rest of the world,
including occupied territories and
Roman residents never granted
citizenship.
\_ And here I thought it was the Barbarians
that sacked Rome.
\_ I can only shake my head in disbelief at
this statement.
\_ What, you think the Romans sacked
themselves? It was the Visigoths, in
410.
\_ Forest for the trees, dude. |
| 4/3 |
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| online.wsj.com/article/SB121659695380368965.html Page A12 Washington is teeing up "the rich" for a big tax hike next year, as a way to make them "pay their fair share." Well, the latest IRS data have arrived on who paid what share of income taxes in 2006, and it's going to be hard for the rich to pay any more than they already do. The data show that the 2003 Bush tax cuts caused what may be the biggest increase in tax payments by the rich in American history. The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. Perhaps he thinks half the country should pay all the taxes to support the other half. Aha, we are told: The rich paid more taxes because they made a greater share of the money. But they also paid a share of taxes not far from double their share of income. In other words, the tax code is already steeply progressive. We also know from income mobility data that a very large percentage in the top 1% are "new rich," not inheritors of fortunes. There is rapid turnover in the ranks of the highest income earners, so much so that people who started in the top 1% of income in the 1980s and 1990s suffered the largest declines in earnings of any income group over the subsequent decade, according to Treasury Department studies of actual tax returns. The most amazing part of this story is the leap in the number of Americans who declared adjusted gross income of more than $1 million from 2003 to 2006. The ranks of US millionaires nearly doubled to 354,000 from 181,000 in a mere three years after the tax cuts. This is precisely what supply-siders predicted would happen with lower tax rates on capital gains, dividends and income. The economy and earnings would grow faster, which they did; investors would declare more capital gains and companies would pay out more dividends, which they did; the rich would invest less in tax shelters at lower tax rates, so their tax payments would rise, which did happen. The idea that this has been a giveaway to the rich is a figment of the left's imagination. Taxes paid by millionaire households more than doubled to $274 billion in 2006 from $136 billion in 2003. No President has ever plied more money from the rich than George W Bush did with his 2003 tax cuts. These tax payments from the rich explain the very rapid reduction in the budget deficit to 19% of GDP in 2006 from 35% in 2003. This year, thanks to the credit mess and slower growth, taxes paid by the rich may fall and the deficit will rise. The very groups like the Congressional Budget Office and Tax Policy Center that wrongly predicted that the 2003 investment tax cuts would cost about $1 trillion in lost revenue are now saying that repealing those tax cuts would gain similar amounts. If Mr Obama does succeed in raising tax rates on the rich, we'd also wager that the rich share of tax payments would fall. The last time tax rates were as high as the Senator wants them -- the Carter years -- the rich paid only 19% of all income taxes, half of the 40% share they pay today. Because they either worked less, earned less, or they found ways to shelter income from taxes so it was never reported to the IRS as income. The way to soak the rich is with low tax rates, and last week's IRS data provide more powerful validation of that proposition. |
| tinyurl.com/8n8ro -> moneycentral.msn.com/content/P125120.asp Company Focus The 5 most outrageously overpaid CEOs advertisement Heres the pantheon of execs whose paychecks soar while their companies suffer. Also: 5 who produce stellar results for a comparative pittance. A Delaware judge ruled in mid-August that Disney's board didn't breach its responsibilities in awarding the huge severance package. While the Ovitz payout may have been legal, it's the type of corporate behavior that costs investors millions of dollars every year. And it's not just a few spendthrift companies throwing good dollars after bad leaders. We scoured corporate regulatory filings and found plenty of examples of overpaid underachievers in executive suites. Ultimately, we came up with a list of the five most overpaid bad chief executives, and another of the five most underpaid good execs. Our goal was more than uncovering a few egregious examples of corporate largess. This was an exercise in finding out which boards are working for shareholders and which have lost sight of that mission. Fat pay, thin performance Rather than focus on single-year offenders, we rounded up -- with help from Standard & Poor's -- the worst performing stocks in the S&P 1,500 over the past several years. Then we looked for the CEOs with the fattest compensation packages -- including base pay, stock grants and the value of options awarded the chiefs, as calculated using the Black-Scholes model, a common tool for valuing options. We also asked S&P to help us find the CEOs who collect the least pay in exchange for the best performance. Jubak's 50 best stocks in the world The worst offenders The upshot: Some boards award breathtakingly large pay packages to CEOs even as the executives trash their shareholders investments. Corporate Library, an independent research firm that provides corporate governance analysis, was the bonus paid by Sanmina-SCI. Hodgsons complaint: Performance pay should reward long-term results. But the Sanmina-SCI board handed out a huge bonus just because of good results in one recent quarter -- even as long-term investors suffered. Hodges thinks egregious pay packages may have more to do with oversized egos than any real challenges that come with occupying the corner office. He points out that Sun Microsystems McNealy, for example, earns 32 times President Bushs annual $400,000 salary. Their pay doesnt have anything to do with the level of responsibility. And it doesnt seem to have anything to do with how well they run their companies, either, says Hodges. The ratio of CEO compensation to pay for the rank and file was roughly 200-to-1 in the early 1990s. Now it's more than 450-to-1, says David Lewin, a professor at the UCLA Anderson School of Management. Worse, many average workers are now paid partly through bonus systems and stock options, meaning their livelihoods are tied to often-volatile company stocks. Many executives have similar incentives, but at a vastly greater scale. The Hodges fund is up 35% a year, annualized, over the past three years. Hodges chalks up his good results in part to the fact that he deliberately avoids companies where theres little connection between CEO pay and performance. msgs), Enron and WorldCom were all preceded by excessive executive compensation packages. Weak governance No one is suggesting the companies on our top-five overpaid execs list are committing accounting fraud. But a few companies on our list get weak to lousy grades for corporate governance. Unfortunately, all but Bristol-Myers declined to talk with us. Institutional Shareholder Services, which advises institutional investors on proxy voting and corporate governance issues. Sanmina-SCI gets low grades for having a poison-pill anti-takeover mechanism. That protects management and the board, taking away an important shareholder tool -- the threat of an outside buyer -- for trying to fix problems like excessive pay. Known as a staggered board, this makes it harder for shareholders to quickly kick out a board they dont like. Bristol-Myers says it is taking steps to link executive pay to performance. But the company still has a long way to go, says Hodgson of the Corporate Library. The company gets low grades for excessive options to top execs, a poison pill and a staggered board. Albertson's and Sun Microsystems are more friendly to shareholders, but you cant really say they are shining examples. Each has better corporate governance than about half the companies in the S&P 500, says ISS. ISS gives Sun Microsystems credit for paying McNealy a minuscule base salary of just $100,000 from 2002 to 2004, at the low end of the scale for CEOs. It also says the board has done a commendable job of structuring McNealys compensation to focus on annual bonus and long-term incentives. A better way Can investors do more than vote with their feet? Activist shareholders sometimes fight overly generous pay. The AFL-CIO, for example recently submitted a proposal to Albertsons shareholders asking for more performance-based pay. Another approach is to simply look for companies that have great performance and reasonably paid leaders. Thats a sign that boards and top managers feel a responsibility towards shareholders. msgs) paid CEO Joel Moskowitz an average of just $766,000 over the past three years, while Ceradyne's stock shot up 924%. The company makes ceramic components used in technology. msgs) paid CEO Joseph T Dunsmore $744,000 a year over the past three years while the stock advanced 320%. One sign of these companies' investor-friendly nature: Ceradyne, Whole Foods and Jo-Ann Stores use performance-based options and stock grants, says Hodgson. Jo-Ann Stores, he says, "is an example of a company that has so much faith in its executives, the board is willing to tie their long-term compensation even closer to performance. Many of these companies are much smaller than the five on our worst-paid CEO list. But from an investors point of view, does that really matter when you are making 500% on a stock in four years instead of losing 93%? At the time of publication, Michael Brush did not own or control shares in any of the companies listed in this column. IFOverture MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances. |