Thursday, July 18, 2013

Here's more evidence that America desperately needs an excess wealth tax – unless we want to see a return of this contraption




I’ve ridden this hobby horse before, most notably here, and also here among other places, but this nation desperately needs to tax not only more of the incomes of the superrich, but also their accumulated wealth.

I give you as my latest case-in-point, the situation of the homeless in New York, and by contrast, the prices that the insufficiently-taxed superrich seem to be gladly paying for a place to call home.

According to a letter I’ve received from somebody at the Stribling real estate brokerage firm in New York concerning the city’s apartment market: 
· The $4 million and above luxury market in the first half of this year was the strongest
since at least 2007, with 759 contracts signed, compared to 807 such contracts for all
2012; 1/3 of the contracts were for new condos that won’t be completed for at least
years. 
· In the $10 million and above market, 142 contracts totaling $2.08 billion were signed in the first half of this year, compared to 160 contracts totaling $2.9 billion for all of last year; 44% of this year’s contracts were for new developments and were sold off of floorplans.
 Hey, $10 million “and above”  apartments (some of those “aboves” have paid above $50 million) can happen simply because millionaires and billionaires have the money to throw away for them. They’re largely a horde of little Anthony Weiners, waving around pictures of their apartments instead of their penises, boasting implicitly, “Look how big mine is.”

All that’s fine, up to a point. The point is where you see the statistics for homelessness in New York. The following is from the city’s Coalition for the Homeless:
•Each night more than 55,000 people -- including more than 21,000 children -- experience homelessness. 
• Currently 50,700 homeless men, women, and children bed down each night in the NYC municipal shelter system.   
• Additionally, more than 5,000 homeless adults and children sleep each night in other public and private shelters, and thousands more sleep rough on the streets or in other public spaces.
• During the course of each year, more than 105,000 different homeless New Yorkers, including nearly 40,000 children, sleep at least one night in the municipal shelter system. 
• The number of homeless New Yorkers in shelters has risen by more than 60 percent over the past decade.
Hey, $2.8 billion could rent a lot of modest one- and two-bedroom apartments for families that are currently sleeping in the streets. There’s not enough money available to do that, you complain, Mayor Bloomberg? There would be if the people were taxed differently if they can shell out $10, $20, $50 million for one out of what is likely to be two or more residences .

In fact, one of The Crank’s Laws states that if you pay, say, $45 million for an apartment and $10 million for a house in the Hamptons that’s so difficult to commute to, you have to charter a helicopter to get you there, you have far too much money for the good of society.

The problem isn’t only a New York City problem. It’s national. All but a handful of us are getting poorer, while the rich get richer and richer, living off the wealth our productivity has  produced and they have bled from us. Consider this:
Economics columnist Jon Talton recently did a rundown of the facts about today’s American economy. Among his findings: 
• Worker productivity has increased nearly 23 percent since 2000, but hourly wages rose a pitiful 0.5 percent in that period. 
• Taking a longer view back to 1973, productivity is up by 80 percent between now and then, but pay is only up by 11 percent. 
• People at the bottom of the wage scale are earning less now than similar workers in 1979. 
• Employees in the middle of the wage scale are getting 6 percent more than in 1979, but all that increase happened in the 1990s. 
• High earners, meanwhile, are making 37 percent more than back in the 1970s and the much-talked-about folks in the top 1 percent have enjoyed a 131 percent increase in earnings.

From another column by Jon Talton, I found this:
• People who became unemployed between 2007 and 2009 but found new, full-time jobs took an average wage cut of 10.5 percent. 
• In 2011, wages for males with college degrees were 5 percent greater than in 1979. For men with only high-school degrees, entry-level wages were 25 percent lower than in 1979. 
• College-educated women saw gains of 15 percent over the same period for their first job, but the wage was still 9 percent below what a college-educated man made in 1979. Women with only high-school education worked for wages 10 percent below the poverty threshold and 14 percent worse than the wages of women with comparable education in 1979. 
• In 1979, more than 63 percent of high-school graduates landed entry-level jobs with employer-provided insurance. In 2010, the number had dropped to 22.8 percent.
 If the superrich think they’re “winning” by choking off income from the vast majority of the nation, I have some old news for them. It’s called the French Revolution of 1789. You know, the one where they set up a guillotine in what is now the Place de la Concorde, and mercilessly rolled heads.

If this nation doesn’t restore some equity to incomes, it can and probably will happen here, in some modern form. Maybe the form relates to the ease of getting a gun. If the gates of Versailles couldn’t hold against a crowd of enraged peasants with pitchforks, I doubt that gated communities and doorman apartment buildings will hold against underpaid American workers armed with their Wal-Mart AK47s.

I hope that the income inequity situation will be corrected, or that I won’t live long enough to the consequences. But if I do, I plan to take a front row seat next to Mme. Defarge, this time no doubt texting with her I-Phone instead of clicking her knitting needles, and see how high a billion dollar head will bounce.

5 comments:

Steve M. said...

I fear the have-nots will kill one another a hell of a lot sooner than they'll kill the rich. But we'l l see.

Patricia said...

Crank, it's obviously not lost on you that Bastille Day was the 14th. I was going to blog about until the Zim verdict went down. My research showed that back in the day the French aristocracy wouldn't pay any taxes, putting more pressure on the masses who were expected to "eat cake" along w/picking up their slack. My daughter was in NYC for an audition and was just so saddened to see the "cake eaters" in the street begging or trying to find a place to rest. You are right on the money so to speak, those that will not learn from history are doomed to repeat it. Excellent post and research to back it up! Off with their heads! Bonsoir!

Anonymous said...

Hello Crank,

You should know that your pages are read and appreciated in France...
Here, the more time runs, the more our good old guillotine becomes quite a vow for many men and women; of course, a virtual "Veuve".
A force to be indignant, maybe they will try some political guillotines in the upcoming elections. To recover at least some freedom of thought and expression...
OK, billionaires are on another planet, but changing the politicians is a way to achieve their friends. Unless a global revolution is brewing ?
Many greetings.
Andre.

Cirze said...

Viva la guillotine!

Of course, in this mentally/emotionally handicapped country, the poor will be gladly lining up for it in order to collect a check on the way in.

And it will be constructed by the rich.

Love ya,

S

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