Forum Post: Root Cause and Recommended Solution
Posted 13 years ago on Oct. 15, 2011, 11:39 p.m. EST by robertmortimer
(9)
This content is user submitted and not an official statement
You've identified the general source of the problem, however, in order to gain broader public support, I would strongly recommend that you more specifically identify root causes as well as provide practical resolutions.
Following please find my analysis and recommendations:
ROOT CAUSES
(i) wealth concentration is a natural byproduct of capitalism
(ii) wealthy individuals possess political power and utilize this power to manipulate the political system in order to create additional wealth
WHAT HAPPENED
The wealthy manipulated the tax system in order to privatize profit and socialize debt. In order to have more funds available to invest in new business ventures (in order create additional wealth), the wealthy (via their ability to directly influence the political system) altered individual and corporate tax laws to pay less taxes. This left more money in the hands of the wealthy and gave them the ability to invest in new businesses and create more wealth. Unfortunately, this reduced tax revenue and left the government with an unbalanced budget. To balance the budget, the government borrowed money. As time progressed, the wealthy simply got wealthier and the government simply went into further debt. This is the essence of the problem. This is the privatization of profit and the socialization of debt.
THE HARD DATA
Did this happen in the United States? Yes, look at this data . .
WHAT TO DO ABOUT IT
First, understand that what happened was a natural byproduct of capitalism. Many (Most) humans are greedy. When given the opportunity to stack the cards in their favor, the wealthy did so. If you were wealthy, you would have probably done the same thing.
The wealth of our nation was created by our citizens. Under the manipulated tax laws, the wealthy were able to take an unfair share of this wealth. Their gains were ill-gotten. As such, the citizens simply need to reclaim their fair share of this wealth and distribute it more equally (claw back and redistribute).
The United States is a democracy. The poor vastly out number the wealthy. The poor, by simple power of majority, can force wealth redistribution. This can be achieved by taxing the wealthy individuals and corporations heavily, by setting a net-worth caps, and/or by heavily taxing ‘idle capital’. ‘Idle capital’ is essentially capital not being employed to increase Gross Domestic Product.
STEP 1. Set a practical individual net worth cap. I’d suggest something like $25,000,000 USD per individual. Everything else should go back to the government.
STEP 2. For corporations, wage limits are probably in order (e.g., the highest paid employee cannot be compensated more than 25X the lowest paid employee).
STEP 3. For corporations, excess monies and assets (monies not actively employed to run the business, create new business, or employ people) should be heavily taxed. I’d suggest 35% per year.
In response, the government should utilize these reclaimed funds to . . .
Ensure all citizens have access to basic medical care, shelter, and food.
Ensure all able-bodied citizens are employed or are enrolled in educational programs leading to future employment.
Pay off the debt that was accumulated due to the manipulation of the tax system.
This will strength our country.
Can this be achieved? Yes, quite simply.
This is the second post i'm reading about imposing draconian limits on personal assets. This is a really bad unworkable idea.
Consider people with assets approaching these amounts or in excess of these amounts... and folks with ambition to make $25M... well... they'd just leave your brave-new-country and take their money with them.
Thanks for taking the time to post feedback.
Please note that the $25M number was simply a suggested value to illustrate the concept of a reasonable net worth cap. My goal was to point out that at some level of wealth, the needs of the society should precede those of the individual. For the sake of continuity, I will continue to reference this number in my reply.
Every society needs highly-motivated and ambitious citizens, however, they also need these same citizens to be concerned about the welfare of the nation as a whole as well as other less fortunate and/or less capable citizens.
Why would someone that is truly concerned about the welfare of the nation or other members of society need more than $25M? Beyond this point, wouldn't you be compelled to work for the benefit of others? If you can generate this type of wealth, you are obviously talented and capable. Why would you not want to help those that are less talented or less fortunate?
As far as a flight of capital is concern, I believe if the wealth was created here, it should stay here. A US citizen should not be permitted to retain assets in excess of some reasonable level of wealth. If they refused to surrender assets in excess of the agreed upon reasonable amount, these assets should be seized. If s/he attempted to hide these assets in foreign countries or flee the country with these assets, they should be punishable under tax evasion laws (e.g., similar to the on-going efforts to tax US citizens with assets hidden in Swiss banks).
You should be able to take your $25M somewhere else. Fair play. Any excess wealth created in the US should stay in the US.
DEAR INDIVIDUAL READING THIS, What must we as people do to fight this grave injustice inflicted upon us, by the ones who lust for power? How can we end the reign of the wicked and immoral and mete JUSTICE upon the oppressors as we have suffered from their hands-their blood stained hands... An idea of REVOLUTION-no, the act of revolution enacted by the proletarians! Must we as individuals ,as is always done, remain pawns to these people, these monoliths that we alone as individuals cannot surmounted...I surmise that we are not ignorant to the woes inflicted upon us by their enormities? We must UNIFY! Unity will be the way in which we assert ourselves!...While I realize all are not are not without income or funds and many cannot unify with this growing movement do to reasons of possible opposition and they being the people I'm question who we oppose (Wall Street), and many have responsibility they must tend to that take precedence. We must rise and vanquish this behemothto restore the equilibrium, for when disturbed it causes much chaos and strife in the hearts of man( man being neutral to represent all genders) in his mind and when mans mind and soul are in chaos as many are they rise to vanquish the pestiferous wealthy. However we should not just target these individuals, each of us individually must confront the corruption in our hearts, how can we judge the corrupt and deem them so when we cannot be amenable for ourselves we will surely be deemed hypocrites as we will be.....I am not meaning to say that this protest is in any way unjust, for far too long have we suffered, I mean that we are expected to expiate our sins -assume our parts in the problems we face and how we may have caused it. Yes, the Bankers on Wall Street are corrupt in ways we don't have evidence of without an investigation. But as we suffer soshall they, for we will make it so. But what of our government I say, my fellow citizens do not neglect to Confront the complicit in this affair for the roots of corruption are deeply seated, we have silent enemies amongst us-be warned that although succession in our goals will happen we may face a greater threat to our rights granted unto us from birth be prudent and circumspect. Another issue I wish to address is the idea of mans continual corruption as all things will be permeated with this darkness Inside our hearts.......when a system is created it always deviates from the righteous path, for nations we have learnt of in our education are littered with tales of nations that became corrupt and faded Into the ruin of collapse, we know that a society without corruption is utterly inconceivable, impossible in ways each and everyone of us know...for as long as men exist so shall our inner evil....but I digress from my original Intent of this passage and I ask forgiveness as we must forgive all in all eventual....the rising potentiality of this movement is quite an astonishment, I thought we were not capable of such things and thus I admit I had less faith in my fellow man. I see that we have all come to the realization of the need to bring the greedy to justice, although the reasons for your protesting may be unique to you, you share many goal, I had prognostications, inklings seems more appropriate of a term, that one day man would wake to realize the greater truth outside of his/her reality, and break the cycles of obsession with superficial base needs and trite motives, a dull and predictable lot we were but we've surpassed that I hope....for if not we will founder and fall Into the patterns we had grown so accustomed to, living such prosaic pedestrian lives stultified by the elite and of our own ignorance we always have the means to educate ourselves in this age, we have no limits to what we may learn based on our status in society, the powerful can no longer succeed in keeping us stupefied we have freewill to reason and learn and form our own ideas, ideas that would otherwise have died by the hands of the bigots! Our endeavours shall be crowned with fruition of our goals for our will allows it, we have broken free from the will of the oppressors......as Desmond Tutu stated "If you are neutral in situations of injustice, you have chosen the side of the oppressor." YOURS TRULY-Aaron Thomas Bridge
Having a list of demands is great, but we also need to attack these root cause of this inequality. One way we can do this in theory is to collect rent through land taxation in order to redistribute surplus wealth among the people.
The theory of economic rent has been around for some time, but land taxation has seldom been implemented throughout history. It is well known that the factors of production are composed of land, labor and capital. Land, in the economic sense, can be explained as anything with a productive capacity that has not been created by men or women, but has value created by the community. Labor is any human energy spent , whether by the mind or through brute force, that contributes to a means of production. Capital is mainly what is spent from savings for future production. Under the current system, mainly labor and capital are taxed, while the landed elite make out like bandits with the rents that are created by the community! It is no surprise that civilizations have suffered from vast inequalities since the founding of the first governments.
What we need to fight for is a redistribution of these economic rents for the sake of the people, while at the same time reducing the tax rates on labor and capital. These rents from land are the source of all wealth and are presently held by a small number of wealthy people who will speculate and slow there productive capacity in order to increase profits.
This demand goes out to the people of OWS! If there is one thing we need to change in order to promote equality, environmental protection and job creation through increased productive capacity, this is the solution we need. Please read about economic rent and land taxation in order to fully grasp the concept.
This is something proven in theory and not based on anyone's personal opinion or ideology. While we are divided on many things, it's time to come together with some real demands to benefit the majority of unrepresented individuals of the world. Lets show the top 1% that we know where their unearned wealth is coming from and that we know exactly what is needed in order to bring them back to the real world!
Great post. The key point is "surplus wealth" redistribution. There are several different tax and/or claw back mechanisms that can be employed to achieve the desired end state. I'm glad we have these tools to share our thoughts. Thanks for taking the time.
Yes sir, and I'm also glad there are some people who understand this surplus. Not all taxes are equal and they have different effects on the functionality of our economy. I hope more people like us have the opportunity to understand how this works. Keep taking the time to express yourself bro!!
While I find your comments logically laid out, you need to consider the following: 1. Corporations and the wealthy do, in a properly functioning capitalist system, create jobs. 2. Some of the proposals you lay out may be too draconian to support a capitalist system. It may take away incentive as the capital lines up to go elsewhere.
With that said, what OWS needs to debate is: where do we see society going? Is capitalism salvageable? If it is, is it a system worth preserving? If yes, then how can the correct balance between private profits and public good be struck? If you conclude it is not, what shall it be replaced with?
Much thought needs to be given to the above. Clearly we need change. However, change in of itself is not the solution.
Thanks for the thoughtful and insightful feedback. It sounds like you are well equipped to take a leadership role in this or related efforts.
I do believe our system is salvageable and worth preserving. I'm not anti-capitalism. I'm anti-abuse of the system. In regards to point #1, I agree, however, I believe greed has limited reasonable wealth distribution in the United States. Point #2 is most insightful, capital may move elsewhere, however, I believe the right to participate in our society as a citizen or a corporation should be regulated by a reasonable set of rules that prevents abuse and ensures reasonable wealth distribution. For example, if you desire to be a citizen of the United States, you should be subject to reasonable wealth limits (such as the ones I tried to outline). Any corporation that chooses to do business in the United States should be subject to similar limitations.
We need a system that preserves the incentive to work hard, innovate, create new businesses, jobs, etc. while putting reasonable limits on success and more equally distributing the fruits of our collective labor.
The system must consider that some members of society are more capable than others. The strongest must take care of the weakest. Should a helpless child starve while an individual enjoys an afternoon cruise on a $300M yacht? I hope you don't think so. How about a $300k yacht and thousands of meals, medical care, and school books instead?
I think it's time to change the system.I agree with alot that you have to say,but I'm anti-capitalism because capitalism was made "in my opinion"to keep different social classes apart.They think that they are better or more important than others.By the way,love the "reasonable" wealth limits.but you know any capitalist will scream out socialism to that ideal even if it's $25,000,000.Capitalism=GREED
Thanks for the reply. Regardless of the economic system, I think it will be difficult to eliminate elitism from any society. Some people just feel that they are better or more important than others. Like greed, this attribute seems deeply rooted in human psyche. In the US, we only have to look back a mere 50 years to see the impact of segregation.
The difficulty I've seen with non-capitalistic economic systems is the lack of motivation. If assets are equally split, there is no incentive to be ambitious, to innovate, etc. There is no reward for hard work and no penalty for laziness. Ideally, we would all get up 5 days a week, work to the best of our abilities and be happy that the other members of our society benefit from our labors. Unfortunately, under these systems, people end up asking themselves questions like . . . Why should I do more for the same benefits as those who do less?
I'm proposing a compromise that preserves the incentives to work hard and innovate - reasonable, but not excessive, wealth.
Right-On!!!
Why do so many think they have the answers, while they want to dismiss the greatest gift given to our nation. I doubt that many here, that propose ideas, are as well learned as our framers where. We don't need a new system we need to fix the system.
http://occupywallst.org/forum/smarter-than-them/
Read your post. I think we are in agreement.
pass this poll around https://docs.google.com/spreadsheet/viewform?hl=en_US&pli=1&formkey=dFlNNHJTRlZwMWs5ZjlhTWN0NlZReHc6MQ#gid=0
Perhaps it is time to get voting out of the equation, at least in part. Why not have a branch of government randomly selected from qualified and willing citizens. It could be a requirement of citizenship. It could be considered a great honor to be selected. Real and trackable compensation could be equitable. Imagine, YOUR local mechanic, or High school teacher, SENT to congress, NOT BOUGHT TO CONGRESS, to represent, guess Who?----------------US. Had the founding mothers and fathers had this ability I'm sure we would have a very different Government, one truly BY THE PEOPLE.
Perhaps it is time to get voting out of the equation, at least in part. Why not have a branch of government randomly selected from qualified and willing citizens. It could be a requirement of citizenship. It could be considered a great honor to be selected. Real and trackable compensation could be equitable. Imagine, YOUR local mechanic, or High school teacher, SENT to congress, NOT BOUGHT TO CONGRESS, to represent, guess Who?----------------US. Had the founding mothers and fathers had this ability I'm sure we would have a very different Government, one truly BY THE PEOPLE.
Sounds reasonable given qualified and willing citizens.
Never.
Why?
100% with you.
http://occupywallst.org/forum/steps-to-success/
Time to get money out of politics on both sides of the aisle and fix our corrupt and bought out trade, tax and banking system. http://www.getmoneyout.com/
http://www.dylanratigan.com/2011/08/09/dylan-ratigan-mad-as-hell-his-epic-network-moment/
http://www.dylanratigan.com/2011/08/03/job-wanted-jobs-ending-rigged-trade/
http://www.dylanratigan.com/2011/08/04/jobs-wanted-ending-rigged-tax-code-jobs/
http://www.dylanratigan.com/2011/08/05/jobs-wanted-ending-rigged-banking-jobs/