Market as Economy Guage

Don't kid yourself. 401Ks are paying for retirement homes, health insurance, and it is our security for the future. It is money that can be borrowed against for a variety of things. It is the vast amount of wealth for the boomer generation.

 

Not so. Art Okun did it well before that. Carter referred to it as he ran against Ford, and it later bit him against Reagan (Carter has the highest of any POTUS). Ironically, the composite index for GW Bush was virtually equal to that of Bill Clinton. And people talk about how dismal Bush was? Bush's MI was 8.1. Clinton's was 7.9. That's the closest of any two presidential spreads since this was "tracked."

There are a myriad criticisms of the so-called MI. We'll leave that to another time. Just had to correct the misnomer.

 

Most posit that people are responding to Obama's policies via the stock market, using this as a referendum. Main street IS Wall Street thanks to the proliferation of discount mutual fund/stock traders, not to mention employee controlled Def Contribution accounts.

 

Seeing the "wealth envy" posted by LeBuick and Billwald, I'm reminded of a neighbor of mine several years ago.

When the communists came into Hungary, many peasants were happy because the land was taken from the rich and some of it "given" to them. A while later, these same peasants watched in dismay as the same government that stole from the "evil rich"...came and stole from them.

Wealth envy is fun to play...until you start reaping those consequences. Then it kinda stinks.

 

Most economist use the past to try to predict the future, at least that's what they sell to the public. The rear view mirror analogy is a good example. The sheeple always get fleeced, we are doomed, financially speaking anyway.

 

I thought it was 35% to 39.5%. A 4.5% increase.

That's what happens when you believe your own propaganda.

peace to youraying:

 

I believe 38% was what it was under Clinton when his recession started.

Bush lowered it and ended the recession almost before it had begun.

Obama should have been paying attention.

 

I don't envy the rich. Pragmatically, I am the rich. I could comfortably live on half my retirement. I worry about the kids and grandkids.

Obama says people with $250K income (5 times my income) are middle class. In the Seattle area I guess that families with 2 professional adults and a half million income are no uncommon. They are working for their money and I never "believed in" work. I don't envy them. Most of them are probably spending 80% or more of their net income, helping the economy, making payments like the rest of us. When they die, they will leave the kids with a house and funeral expenses, just like most of the rest of us.

Most people have trouble with large numbers. Let's consider some BIG numbers. Most money managers say that one can safely cash in 4% of savings a year and keep up with inflation. One million dollars (in most years <G>) in invested assets would produce only $40,000 a year. This person would pay 15% capital gains on his living money. A person who was paid $40,000 for his work would pay about 8% non deductible
payroll tax and have at least a 25% marginal tax rate. The first guy leaves his kids $1 million cash and a house or two. The second guy, a house and funeral bills.

The person with $100 million in invested assets. If he pulls out his $400K a year he pays 15% capital gains and leaves his kids $100 million, several houses, and a couple of boats.

The guy with $Billion in invested assets could pull out $40 million a year and pay 15% capital gains. How many people could spend $40 million a year if they worked at it? When he dies most of his money is probably in tax exempt 401c3 charities. It gives him power, not spending money. One can crush lots of people by controlling a billion dollars.

The guy with $40 billion annual draw????? Boggles my mind. He could buy small countries and all the people in them.

 

But for the guy only making 300k a year, it will surely hamper his spending. And there are many more people like him than the uber-rich Bill Gates.

 

No he said he was only going to raise taxes on the rich.

 

If you think Bill Gates and Warren Buffet pay that tax rate (or likely, income tax at all) you're crazy. They live off dividends, options, etc....passive income that is not taxed marginally. ​

 

So true, Tom. The marginal rate increases really affect small business owners the most - the S-Corp, LLC or partnership members who are netting just above 250K. And despite some moronic views to the contrary, people making 250k do have to budget their spending - if they pay $1,000 more in taxes, that is $1,000 they won't be spending or investing in the market economy.​

 

LB, I noticed that you failed to address the point of my post above. There are thousands, if not hundreds of thousands of people who's taxes will be raised. A $1,000 here and a $1,000 there adds up pretty quickly. That's a lot of money that won't be working in the market economy effectively.

 

Source, please?

And does that include people who gross $250K+, but net much less? I know there's not 50 million folks in this category, but I also know how the government (particularly the IRS) can "make people rich."

Gotta watch them thar statistics...