Tuition—at some point, it began to be called tuition, instead of “fees”—at the UC is up, lots, these days. Which is the occasion for Michael O’Hare’s letter to his students, via Mark Thoma. Basically, he points out, a generation that got its UC education (and lots of other state services) paid for by its parents is declining to do likewise for its children. Perhaps not the greatest of generations.
A letter to my students
by Michael O’Hare
Welcome to Berkeley, probably still the best public university in the world. Meet your classmates, the best group of partners you can find anywhere. The percentages for grades on exams, papers, etc. in my courses always add up to 110% because that’s what I’ve learned to expect from you, over twenty years in the best job in the world.That’s the good news. The bad news is that you have been the victims of a terrible swindle, denied an inheritance you deserve by contract and by your merits. And you aren’t the only ones; victims of this ripoff include the students who were on your left and on your right in high school but didn’t get into Cal, a whole generation stiffed by mine. This letter is an apology, and more usefully, perhaps a signal to start demanding what’s been taken from you so you can pass it on with interest.
Swindle–what happened? Well, before you were born, Californians now dead or in nursing homes made a remarkable deal with the future. (Not from California? Keep reading, lots of this applies to you, with variations.) They agreed to invest money they could have spent on bigger houses, vacations, clothes, and cars into the world’s greatest educational system, and into building and operating water systems, roads, parks, and other public facilities, an infrastructure that was the envy of the world. They didn’t get everything right: too much highway and not enough public transportation. But they did a pretty good job.
Young people who enjoyed these ‘loans’ grew up smarter, healthier, and richer than they otherwise would have, and understood that they were supposed to “pay it forward” to future generations, for example by keeping the educational system staffed with lots of dedicated, well-trained teachers, in good buildings and in small classes, with college counselors and up-to-date books. California schools had physical education, art for everyone, music and theater, buildings that looked as though people cared about them, modern languages and ancient languages, advanced science courses with labs where the equipment worked, and more. They were the envy of the world, and they paid off better than Microsoft stock. Same with our parks, coastal zone protection, and social services.
This deal held until about thirty years ago, when for a variety of reasons, California voters realized that while they had done very well from the existing contract, they could do even better by walking away from their obligations and spending what they had inherited on themselves. “My kids are finished with school; why should I pay taxes for someone else’s? Posterity never did anything for me!” An army of fake ‘leaders’ sprang up to pull the moral and fiscal wool over their eyes, and again and again, your parents and their parents lashed out at government (as though there were something else that could replace it) with tax limits, term limits, safe districts, throw-away-the-key imprisonment no matter the cost, smoke-and-mirrors budgeting, and a rule never to use the words taxes and services in the same paragraph.
Now, your infrastructure is falling to pieces under your feet, and as citizens you are responsible for crudities like closing parks, and inhumanities like closing battered women’s shelters. It’s outrageous, inexcusable, that you can’t get into the courses you need, but much worse that Oakland police have stopped taking 911 calls for burglaries and runaway children. If you read what your elected officials say about the state today, you’ll see things like “California can’t afford” this or that basic government function, and that “we need to make hard choices” to shut down one or another public service, or starve it even more (like your university). Can’t afford? The budget deficit that’s paralyzing Sacramento is about $500 per person; add another $500 to get back to a public sector we don’t have to be ashamed of, and our average income is almost forty times that. Of course we can afford a government that actually works: the fact is that your parents have simply chosen not to have it.
I’m writing this to you because you are the victims of this enormous cheat (though your children will be even worse off if you don’t take charge of this ship and steer it). Your education was trashed as California fell to the bottom of US states in school spending, and the art classes, AP courses, physical education, working toilets, and teaching generally went by the board. Every year I come upon more and more of you who have obviously never had the chance to learn to write plain, clear, English. Every year, fewer and fewer of you read newspapers, speak a foreign language, understand the basics of how government and business actually work, or have the energy to push back intellectually against me or against each other. Or know enough about history, literature, and science to do it effectively! You spent your school years with teachers paid less and less, trained worse and worse, loaded up with more and more mindless administrative duties, and given less and less real support from administrators and staff.
Many of your parents took a hike as well, somehow getting the idea that the schools had taken over their duties to keep you learning, or so beat-up working two jobs each and commuting two hours a day to put food on the table that they couldn’t be there for you. A quarter of your classmates didn’t finish high school, discouraged and defeated; but they didn’t leave the planet, even if you don’t run into them in the gated community you will be tempted to hide out in. They have to eat just like you, and they aren’t equipped to do their share of the work, so you will have to support them.
You need to have a very tough talk with your parents, who are still voting; you can’t save your children by yourselves. Equally important, you need to start talking to each other. It’s not fair, and you have every reason (except a good one) to keep what you can for yourselves with another couple of decades of mean-spirited tax-cutting and public sector decline. You’re my heroes just for surviving what we put you through and making it into my classroom, but I’m asking for more: you can be better than my generation. Take back your state for your kids and start the contract again. There are lots of places you can start, for example, building a transportation system that won’t enslave you for two decades as their chauffeur, instead of raising fares and cutting routes in a deadly helix of mediocrity. Lots. Get to work. See you in class!
49 comments
August 25, 2010 at 5:08 pm
politicalfootball
Dear Professor O’Hare,
Thank you for your kind welcome to this excellent university, and thank you for your generous words regarding me and my classmates.
Indeed, it is gratifying to know that you and other dedicated professionals are still available for public sector work after our great industries have skimmed the best minds and hardest workers from the talent pool.
My parents counseled me that when I came to Berkeley, I would find professors who, while honorable and kind, had failed by dint of their public-paid salaries to grasp the essential truth about our capitalist system: True service to the public is rewarded financially, and those in the best position to benefit from a Berkeley education are those, like me and my classmates, who are able to afford it.
While you see our parents as being selfish, I can only tell you that they have been very good to me, and have planned wisely and made great sacrifices to ensure that I am among the deserving few who are able to take advantage of this great educational opportunity. Had our parents not had the wisdom to hang onto their money instead of allowing it to be wasted by their government, it could well be someone else sitting in my classroom chair. I have nothing but gratitude for my parents’ efforts, both as contributing members of society and contributing members of the Republican Party.
You make it plain toward the end of your letter where you have gone astray. Speaking of those less worthy, you say, “They have to eat just like you, and they aren’t equipped to do their share of the work, so you will have to support them.”
No. We won’t. That was the great insight of my parents’ generation and, God willing, their wisdom will be applied even more broadly so that the unproductive and undeserving exert even less of a drag on society in the future.
See you in class!
Warmest regards,
A. Student
August 25, 2010 at 5:26 pm
Vance
I’m with O’Hare on the prescriptions. But the argument from an implicit intergenerational compact proves too much. We could equally well set it up to show that the generations before WWII implicitly chose to provide a minarchist state and stunted education to their kids, leaving them to learn in the school of hard knocks, and the children of the Baby Boom violated this compact by taking more education and public services than they deserved. It would be simpler just to argue that a strong educational system and broad opportunity are goods that are worth paying for, period.
Speaking of intergenerational compacts, we readers of liberal blogs hear often about the one made in the early ’80s for Social Security. (Here’s Kevin Drum, and a related item from Krugman.) Can someone point me to where this compact/tradeoff/deal was explained as such, at the time?
August 25, 2010 at 5:59 pm
Laurel
I can’t express how disturbed I am by the first student response, the student who thanks his parents for drawing the line between the generations of “haves” and “havenots” so firmly in the sand. I assume, of course, should his own child be “unproductive” due to some defect of body or character, that student would be quite fine with tossing his own unproductive child into the street. Ditto his own parents, when they are too old to be “productive.” And of course all the people who are “unproductive” because of damage (environmental, diet, stress, racism, etc.) caused by people with attitudes much like those of this student? Throw them out, too.
Though the student also seems to miss the point (and perhaps his parents did, too?), that these “undesirables” don’t simply go away. They don’t fall into the sea. There’s some resentment involved, but I think the student is being short-sighted not to understand that his proposal, history teaches, leads us to an often bloody and always nation-damaging revolution.
I, for one, would rather invest in the education of ALL Americans, present and future.
Sickened,
Laurel
August 25, 2010 at 6:05 pm
Vance
Laurel, consider that politicalfootball might have been kidding. (Beneath his (?) real pseudonym, I suspect this guy may be lurking.)
August 25, 2010 at 6:45 pm
politicalfootball
Sorry, Laurel, I’m an older guy and I sometimes forget that there no longer is such a thing as over-the-top satire. If you can believe it, when I was young, Howard Beale was a wild caricature. When I was young, Network was funny.
It may have been 20 years ago or more when Lily Tomlin said, “No matter how cynical I get, I can’t keep up.” Truly, sometimes I can’t keep up.
Vance, you make me sound more clever than I am. I hadn’t heard of Student before.
August 25, 2010 at 7:21 pm
politicalfootball
But the argument from an implicit intergenerational compact proves too much.
I disagree with this. I think the intergenerational aspect of it is just another way of discussing a collective action problem.
It is in our best interests to consume as much of our planets’ resources as possible. Global warming, no matter how severe it gets, is a matter of no import whatsoever – unless you assume some kind of compact between us and our descendants.
The Baby Boomers who got their great educations were accepting a gift granted willingly by their ancestors and, in many cases, declining to pass it on. O’Hare has the right take on this.
August 25, 2010 at 7:35 pm
nick
Perhaps we should examine the educational system that has as many administrators as it does teachers. Teachers who can retire young with a great, publicly funded pension who are living longer and longer and thus becoming a drain on the system.
No disrespect, but we have to examine all sides of the problem, not just “ya’ll aren’t paying enough to allow me to do my job.”
Take a paycut, if you feel so strongly about the students. :) Somehow, some way, the teachers at private educational institutions make it on half your salary with no defined benefit plan on the taxpayers dime when they retire. Of course, the some moonlight at state-run school for the extra money, or jump ship altogether for the more lucrative contracts… but is that really in the students’ best interest or their own?
August 25, 2010 at 7:49 pm
JP Stormcrow
Yeah, all those Boomers voting for Prop 13 just as they came into the housing market in 1978 really messed things up*… This generally good stuff, but the generational stuff inevitably screws it up, with the barely beneath the surface resentments.
*And sure later they had time to do things about it.
August 25, 2010 at 7:54 pm
JP Stormcrow
and stuff
August 25, 2010 at 8:03 pm
Michael H Schneider
Teachers who can retire young with a great, publicly funded pension who are living longer and longer and thus becoming a drain on the system.
Uhm, that’s not exactly true, is it?
The university pension system used to be a defined contribution system, where school and professor both made contributions to TIAA-CREF out of salary during the working years. At retirement the pension became solely an obligation of TIAA-CREF, with not a penny more added by the school.
Has that changed?
August 25, 2010 at 8:20 pm
eric
Somehow, some way, the teachers at private educational institutions make it on half your salary
Hey, EotAW community — when commenters say flatly untrue stuff like this, what’s the preferred response? I know silbey likes to latch onto such commenters like a pit bull and never let go. But frankly, that takes a lot of energy. What do you think?
(And of course, we did take a pay cut, aka furlough, thanks very much.)
August 25, 2010 at 9:26 pm
Vance
eric, we should call it out. nick, you’re making stuff up.
pf (bearing in mind that we’re in agreement on how policy should change in the real world): if some policy benefits my generation, does it follow from that that I must continue that policy? Sure, if I decide against the policy, I can be made to look bad on grounds of hypocrisy, but does it logically follow?
August 26, 2010 at 1:19 am
David in San Jose
If I understand Professor O’Hare correctly he wants to raise an additional $35 billion in tax revenue ($1000 * 35 million).
I don’t see how you get there. Looking at the Franchise Tax Board data:
Click to access 2008_B-9-1_High_Income_Returns_by_Income_Level_and_Average_Tax_Rate.pdf
The people with a AGI of over $200K pay about $33 billion in income tax which is 67 percent of the total. The top tax rate would have to be doubled to collect the extra revenue. Even if it was possible to change the tax rate, people in the upper income bracket would invest more energy in tax avoidance strategies. It doesn’t seem likely that the $35 billion would be collected.
August 26, 2010 at 4:40 am
dana
nick, what you’re saying isn’t true, and it’s hard to take such a proposal seriously in response to the issues that are raised in the letter. They “make it” by… working second jobs? That’s the model you propose to preserve a top public university?
Vance, I think O’Hare means to address that concern in by introducing the idea that things like public education are a *loan*. That doesn’t mean that the terms can’t change, but that some recognition that maybe the successes bore some relationship to the well-funded infrastructure.
August 26, 2010 at 5:26 am
politicalfootball
I can be made to look bad on grounds of hypocrisy, but does it logically follow?
You have to start with some sort of First Principle here, and I’m prepared to go with “hypocrisy is bad.”
I’ll say again that I see this as a collective action problem. If I benefit from some public good, it it okay for me to stop paying for that good once my benefits end?
To get back to your original comment:
It would be simpler just to argue that a strong educational system and broad opportunity are goods that are worth paying for, period.
This is vulnerable to the counter-argument: yes, they were good things when I used them, but I’m done directly using them now, and any ancillary benefits I get from this policy today are insufficient to justify the amount of money I’m being asked to pay.
Absent some sense of obligation to somebody else (and “posterity” is one key example of “somebody else” in this case), your reasoning doesn’t work any better than mine.
August 26, 2010 at 6:30 am
TF Smith
When it comes to public tax (and other) policies, I think the examples of the Eisenhower years, when the US had high employment, a GOP President who warned against the military-industrial complex, and had a 90% top tax rate, is not a bad model…
I’m sure a 21st Century Republican CAN argue that DDE was wrong on tax policy, but I’m not sure how he would do it with a straight face…
August 26, 2010 at 8:00 am
Ralph Hitchens
Isn’t it true, as alluded to by O’Hare or someone at his blog, that since the 1970s the shareholder classes have reaped most of the income gain from the increases in productivity? This could have something to do with fueling a tax revolt by the middle & working classes.
August 26, 2010 at 10:00 am
David in San Jose
@TF Smith
Nothing spurs innovation and risk-taking like high marginal rates. In fact I overheard our VC saying he would fund more companies if only the government would increase the tax rates.
Several Indian co-workers told me something similar, they were going home because they didn’t feel like they would paying their fair share.
August 26, 2010 at 10:15 am
Vance
David, I’m not sure why individuals’ unsurprising desire to pay lower taxes themselves proves anything. Speaking only for myself, I’m capable of thinking both that I want to pay less in taxes and that a class of people including me should pay more.
pf: good point.
August 26, 2010 at 10:37 am
politicalfootball
Unlike David, y’all obviously don’t remember the Stock Market Crash and ensuing Great Depression of 1955.
August 26, 2010 at 11:48 am
David in San Jose
@Vance
If innovators and risk-takers don’t respond to incentives than doubling the tax rate shouldn’t be a problem. But that hasn’t been my experience. In the 90’s I worked for a company created by a guy from France. One of the reason he created the company in SV instead of France was the tax rates.
@pf
Outsourcing. Ever heard of it? Maybe there are differences between the 50’s and the 20XX.
August 26, 2010 at 12:31 pm
mrearl
David, if I’m reading the Tax Foundation correctly, California’s second-to-top income tax rate, 9.55%, kicks in at AGI $47K. The top rate attaches at $1M. That covers an awful lot of socio-economic territory, such that it’s not obvious the top rate or top two rates would have to double. However, it does seem likely the *average* rate would have to get a fairly stout hike to produce $35B. But you only need a $35B increase if you want to pay off the $1000 per capita in one year.
August 26, 2010 at 1:00 pm
David in San Jose
mrearl, I think O’Hare is asking for $35B per year.
It is probably a good idea to spread the burden around. Skin in the game and all of that, but most of the money will have to come from the people at the top.
The data at FTB is pretty interesting, I wish there was more of it. If you look at the people over 200K, they pay 67 percent of the income taxes. The people over 1 million pay 40 percent of income taxes and they are .4 percent of the taxpayers (about 55,000 people). It would be interesting to see the income distribution in this group. This group of super rich might be in the hundreds of people. If they were to leave CA it would more difficult to collect the additional revenue.
August 26, 2010 at 1:21 pm
silbey
I know silbey likes to latch onto such commenters like a pit bull and never let go.
I thought that *was* the preferred response. You guys sent me the picture of the pit bull, after all.
August 26, 2010 at 1:26 pm
dana
If you bite the commenters hard enough sometimes they extrude vanilla filling.
August 26, 2010 at 2:01 pm
Erik Lund
I know I do.
August 26, 2010 at 5:30 pm
eric
I guess it is the preferred response. I’m just not in the mood for it.
August 26, 2010 at 5:45 pm
CaliFury
@eric
Someone who says something false who actually cares about being right might respond to a strong challenge by doing research.
But what about people who speak falsely to provoke a fight (waste your time), to push an agenda (tool of the leader) or who are just entertained by people getting upset (dog fighting enthusiast…)?
August 26, 2010 at 5:46 pm
ari
Wait, David, are we talking about outsourcing or the members of the top bracket fleeing the state? I’m losing track of your argument.
August 26, 2010 at 6:58 pm
David in San Jose
@ari
My argument is that raising the marginal rate to level necessary to collect the additional $35 billion will cause some of the top bracket to leave the state. I think this will make it very difficult to collect the additional revenue.
political football and TF Smith both mentioned that marginal tax rates were very high in the 50’s and the economy did very well. I am not an expert in this area, but I suspect one reason the US economy did well was a lack of global competition. In the current decade, Silicon Valley is facing global competition and I think raising marginal rates would encourage VCs to move investment to other areas with lower tax rates. In any case I don’t see a strong positive correlation between high margin rates and a robust economy.
August 26, 2010 at 7:16 pm
eric
I don’t see a strong positive correlation between high margin rates and a robust economy
Western Europe. Canada. You’re welcome.
August 26, 2010 at 7:23 pm
eric
David, which is worse for the UC budget crisis, high marginal tax rates or illegal immigration?
August 26, 2010 at 7:27 pm
eric
Someone who says something false who actually cares about being right might respond to a strong challenge by doing research.
But what about people who speak falsely to provoke a fight (waste your time), to push an agenda (tool of the leader) or who are just entertained by people getting upset (dog fighting enthusiast…)?
Right. There seem to be an awful lot of the latter on the internets and on this blog lately. I don’t know which nick is. But if he thinks that on average faculty at public universities are paid more than faculty at private universities, or that on average faculty at the UC are paid more than faculty at similarly rated private institutions, I believe a small amount of googling will show he’s (as Rick said in Casablanca) misinformed.
But going on to say that we ought to take a pay cut (smiley emoticon) in a year in which we have taken a pretty well publicized pay cut, suggests it’s worse than being merely misinformed.
August 26, 2010 at 9:56 pm
David in San Jose
David:
I don’t see a strong positive correlation between high margin rates and a robust economy
Eric:
Western Europe. Canada. You’re welcome.
I might not be phrasing it correctly but what I mean to say is that high marginal rate do not imply a robust economy.
I don’t consider Western Europe a robust economy. The real GDP growth rates are very low:
Germany 1992-2010 average .28%
Italy 1985-2010 average .38%
England 1985-2010 average .58%
France 1985-2010 average .48%
Canada 1985-2010 average .63%
US 1985-2010 average 2.74%
Source: http://www.tradingeconomics.com
I am sure Germany is lower because the cost of reunification.
August 26, 2010 at 10:31 pm
David in San Jose
David, which is worse for the UC budget crisis, high marginal tax rates or illegal immigration?
I would say illegal immigration. The current top marginal rate is one of the highest is country but I think more state revenue is consumed by illegal immigrants.
August 26, 2010 at 11:12 pm
John Mack
Thanks for a thoughtful article.
I believe one of the reasons for the decline in support for pubic investment (especially education) is the reduction, by the religious right, of the purpose of marriage to procreation.
Many years ago this elder citizen learned, at his Catholic school,that marriage had four basic purposes.
1. Companionable love. Spouses forming a loving partnership to support each other for better or for worse.
2. Generative love. Providing for the next generation, leaving a better world to the children of the world. This could be done by loving procreation and nurture, or by other means such as teaching, paying taxes for public and common goods, serving the community, serving the poor, adoption, etc.
3. Procreation, for most, but not all.
4. For Christians who believe in sacraments, living a life that exemplifies God’s love for humanity and Christ’s love for his Church.
These teachings foster kindness and a sense of the common good, not a belligerent and/or selfish stance towards the world. These purposes are also compatible with gay marriage, so maybe that’s why we seldom hear of them now.
August 27, 2010 at 7:38 am
Malaclypse
I don’t consider Western Europe a robust economy. The real GDP growth rates are very low:
What is the real GDP grow per capita? Since our population grows a lot faster than Western Europe’s, simply comparing total GDP is apples-to-oranges.
August 27, 2010 at 7:55 am
David in San Jose
@Malaclypse
I am not comparing total GDP, I am comparing GDP growth rates.
August 27, 2010 at 8:51 am
Erik Lund
David:
So was Malaclypse. GDP growth rates need to be considered alongside population growth rates. This makes the Canadian case the only valid comparison.
The numbers you cite (0.63% versus an American 2.) are a compelling point in favour of your case.
Too bad that they’re wrong. You seem to have dropped a “2” before the decimal.
You’ve also omitted consumption taxes from your estimate. I notice that the current budget proposal calls for cutting the sales tax and raising the income tax.
Sigh. This would seem to be a golden opportunity to introduce a progressive VAT, but I understand that politics is politics.
You go on to observe that 0.4% of Californians earning more than a million dollars pay 40% of income tax.
This is, in itself, hardly an unreasonable number. Payroll tax, medical insurance premiums and mortgage interest deductions apparently mean that the 40% of Californians earning less than $50,000/year pay virtually no net income tax.
On the other hand, California has 2.6 doctors per thousand people. Doctors make lots of money, and deserve to do so. That said, there is no reason that they cannot pay higher taxes on that income, especially if it is for the good of their patients.
You go on, however, to speculte that a few hundreds of Californians may earn a significant portion of this 40% of taxed state income. These people, you further suggest, are entirely mobile. Unlike doctors, who can hardly relocate away from their patients, these persons draw their income by virtue of being who they are.
That is to say, they are rentiers who can clip coupons just as easily in Mississippi, and will do so to save a few cents on the dollar on the state income tax. (Why they have not already moved to Barbados is beyond me, but I am no tax accountant.)
It seems to me, and I offer this suggestin with great diffidence as it is not my country, that this is not right, and the solution has already been employed in your country. The legislature of California can simply introduce a bill of attainder against any such emigres. What is good for Loyalists is good for –whoever the heck these people are.
August 27, 2010 at 1:11 pm
David in San Jose
Erik,
I see the point about comparing countries GDP per capita. I got my data on Canada from this site:
http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=CAD
I don’t have a problem with the high earners paying 40 percent of the taxes. I think it will be tough to get an additional $35 billion per year from them.
A bill of attainder might work once, but it not help in bringing new investment to CA.
August 27, 2010 at 1:53 pm
chris
A bill of attainder might work once, but it not help in bringing new investment to CA.
The location of *investment* — as in factories or storefronts — is not dependent on the place of legal residence of the owner, but on where it makes economic sense to put the facilities invested in. Which is why manufacturing is mostly being offshored and retail and service businesses mostly aren’t, regardless of where the owners of either type of business live.
*Small* businesspeople often own and manage at the same time, which may require them to live near their business. Even then, though, they locate the business based on economic opportunity and then live near it because they have to, so tax codes can’t really drive them away even if they were in that income category in the first place (which they’re mostly not; even if the small business grosses that much, most of it will be deducted in business expenses, payroll, etc.).
I don’t have a problem with the high earners paying 40 percent of the taxes.
Cool — because currently they’re only paying 40% of the *income* taxes, so to get them to pay 40% of the *total* taxes would involve significant tax hikes for them. Glad to have you on our side on that one.
August 27, 2010 at 8:46 pm
TF Smith
David –
Yes, I’m sure grass will poke through the bleached, tumbleweed-strewn streets of Atherton and Hillsborough, as scores – even hundreds – of millionaires flee to Phoenix and Henderson…I hear Havasu is lovely this time of year.
At which point, of course, the rif-raff of Cupertino and San Bruno will be able to move up.
When you and rest of the Silicon Valley millionaires leave, can you take the Hollywood millionaires with you? Please?
August 27, 2010 at 10:50 pm
David in San Jose
TF Smith,
I was kinda hoping the Hollywood people would leave first, provided they leave their money.
August 27, 2010 at 11:55 pm
David in San Jose
chris
Another problem of putting so much of the tax burden on a small number of people is that it doesn’t guarantee a steadily increasing source of revenue. If the super-rich have a bad year, (well bad for them anyway) it would cause a big drop in collected taxes. It would be a shame if the UC system had to drop organic chemistry because J LO’s “The Backup Plan” had bad word of mouth in the opening weekend.
August 28, 2010 at 7:58 pm
TF Smith
If the super-rich have a bad year, increase their taxes to 95 percent and let ’em squeal…
You are really going to have a tough time evoking sympathy for millionaires and billionaires who have inhereited wealth, gamed the system, traded their way through Ponzi-scale “investment” and “venture capital” con games, and otherwise done nothing constructive with their riches for the past quarter-century or more.
August 28, 2010 at 10:40 pm
B'hommad
Would it be useful to point out that the breaking of the contract O’Hare is talking about had nothing to do with income taxes but was the immediate approximate halving of property taxes by Proposition 13 and the following shift of taxable property value, which could be reassessed only on re-sale, toward residential and and away from industrial, commercial, and agricultural real estate?
When I was attending UC for fees way under $100/semester as I recall, I hazily considered that the real cost may have been paid out of state property taxes, the same way my elementary and high schools and my municipal services were funded by local property taxes approved by majority vote. Is there anyone out there who knows whether that was true? If it is, we could hope that David from San Jose would burrow back into the tax records for more research on what it all means, and we wouldn’t have to hear from him for a while.
August 29, 2010 at 2:25 pm
TF Smith
David from San Jose is probably too busy taking orders from the Koch brothers…
August 30, 2010 at 6:41 am
chris
If the super-rich have a bad year
Since most of what they do is gambling against each other, how can they all have a bad year at once? Haven’t they collectively made book at the expense of everyone who relies on them for financing?
Of course, if what you mean is that the super-rich could have a bad year because everyone is having a bad year (i.e. 2008), that’s what deficit spending is for. Some other year they will have an unusually good year or several (e.g. late 90s) and the debt can be paid back down. This is pretty basic stuff.
Nothing *guarantees* ever-increasing revenue, but right now, the idea that the super-rich will get super-richer is one of the best bets out there. Even if some individuals fall out, it will be because someone else pushed in and crowded them out (very much the case for movies, for example; although I think the stars are usually guaranteed a truckload of money even if the movie flops).
August 30, 2010 at 5:08 pm
David in San Jose
Some other year they will have an unusually good year or several (e.g. late 90s) and the debt can be paid back down. This is pretty basic stuff.
But what if Gray Davis needs that money to payoff the prison union?