To what extent has democracy in the US been subverted by money?

[crazy canuck]

Immensely, when one party exists solely to promise the 99%er more money, that party will win elections

That would be true if the 99% vote for policies that would actually benefit them.  But that is not actually what happens. As we discussed in another thread, for a number of reasons, low income workers dont approve of better benefits.  Also, for some reason, particularly in the US, voters to support taxation policy (or at least political parties who propose such policies) that really only assists the 1%.  For example in what way did the 99% benefit by a reduction in the top rates of income tax which are only paid by the 1%?

In what way do the 99% benefit from capital gains exemptions that will only really be enjoyed by the 1%?

One can go on of course.

Yi, in answer to your question about corporate tax the answer is easy, taxation polices which allow corporations to pay tax in low tax jurisdictions so the tax paid in the US is avoided or signficantly reduced so as to provide the facade of a progressive tax system.

Berkut, I think you will find this passage from Picketty's book discussing tax policy in the US interesting.  He is, in part, attempting to find an explanation for why wage disparity is so much greater in the US than in any other nation.   "the decrease in the top marginal income tax rate led to an explosion of very high incomes, which then increased the political influence of the beneficiaries of the change in the tax laws, who had an interest in keeping top tax rates low or even decreasing them futher and who could use their windfall to finance political parties, pressure groups, and think tanks." (p. 335).

[DGuller]

Based on the the discussions on income inequality, I would agree that the US Gini coefficient is in general not such a big outlier. I got the impression (that I can't tie to any data) that while maybe the Gini coefficient for 100% of the population is comparable, there is still a more extreme concentration of wealth among the 0.001% or whatever that is not significantly influencing the Gini coefficient for the entire population, but still creates a very small group of hyper-rich people that have extreme influence on campaign financing and policy. Not sure if that makes any sense from a statistics perspective, but if e.g. the 1000 richest Americans are hyper rich, that wouldn't influence the Gini coefficient for 300 million too much, right?

  Yes, yes it would.  Dramatically.  Gini is something that applies to the whole population, it can't be split up like income.  Any individual's Gini coefficient is 0.

[Ideologue]

Immensely, when one party exists solely to promise the 99%er more money, that party will win elections

That would be true if the 99% vote for policies that would actually benefit them.  But that is not actually what happens. As we discussed in another thread, for a number of reasons, low income workers dont approve of better benefits.  Also, for some reason, particularly in the US, voters to support taxation policy (or at least political parties who propose such policies) that really only assists the 1%.  For example in what way did the 99% benefit by a reduction in the top rates of income tax which are only paid by the 1%?

Indeed.  The question in the United States is to what extent has the distribution of money been subverted by democracy.  And the extent is "a lot," due to people who basically share OvB's beliefs but not his wife's income.

[Admiral Yi]

Indeed.  The question in the United States is to what extent has the distribution of money been subverted by democracy.  And the extent is "a lot," due to people who basically share OvB's beliefs but not his wife's income.

huh?

[Monoriu]

That would be true if the 99% vote for policies that would actually benefit them.  But that is not actually what happens. As we discussed in another thread, for a number of reasons, low income workers dont approve of better benefits.  Also, for some reason, particularly in the US, voters to support taxation policy (or at least political parties who propose such policies) that really only assists the 1%.  For example in what way did the 99% benefit by a reduction in the top rates of income tax which are only paid by the 1%?

A theory I have read somewhere explains it this way.  People place great emphasis on relative wealth.  Those who are just above the worst-off in society "enjoy" the fact that they are still better off than somebody else.  If the government enact policies that benefit the worst-off, this will close the gap between the two groups.  So the working class won't approve policies that reduce their relative well-being over the worst-off. 

I certainly won't support policies that increase welfare.  Not sure if that is how I subconsciously feel though.  Sure, the taxes on the middle class and the rich won't affect me, but I buy the narrative that we should all be self-reliant. 

[Ideologue]

Indeed.  The question in the United States is to what extent has the distribution of money been subverted by democracy.  And the extent is "a lot," due to people who basically share OvB's beliefs but not his wife's income.

huh?

The peculiarly American ideology that everyone is a potential winner leads people to make seriously bad choices at the ballot.  This is best exemplified by "small government" types who fear "tyranny" and imagine themselves one day to be subject to severe taxation.

[alfred russel]

The US is unique in that it taxes income earned overseas (which presumably skews rich).

I believe you have to be making something like 100k overseas in order to be required to pay taxes on said income.

Depends on what you consider income.

I got boned by this rule. I was in the internal audit department of a company, that had several auditors that traveled 100% internationally. I would have loved to transfer to that group, but Americans are generally excluded. International employees have to pay taxes on all sorts of food, lodging, and travel perks, and because these people were constantly in hotels and having all sorts of expenses covered by the company (as you would expect), their taxable income was several hundred thousand a year and a son of a bitch to compute (requiring professional assistance). Obviously the company would have to reimburse for this tax expense, and the result was a simple rule: with rare exceptions no americans. None of those auditors really made $100k.

[Admiral Yi]

The peculiarly American ideology that everyone is a potential winner leads people to make seriously bad choices at the ballot.  This is best exemplified by "small government" types who fear "tyranny" and imagine themselves one day to be subject to severe taxation.

The part that puzzled me was the subversion of the distribution of money.

[crazy canuck]

I went back and looked for another passage I thought Berkut would find interesting:

"In the late nineteenth century, in the period known as the Gilded Age, when some US industrialists and financiers... accumulated unprecedented wealth, many US observers were alarmed by the thought that the country was losing its pionering egalitarian spirit.  To be sure that spirit was partly a myth, but it was also partly justified by comparison with the concentration of wealth in Europe... this fear of growing to resemble Europe was part of the reason why the United States in 1910-1920 pioneered a very progressive estate tax on large fortunes, which were deemed to be incompatible with US values, as well as a progressive income tax on incomes thought to be excessive.  Perceptions of inequality, redistribution, and national identity changed a great deal over the course of the twentieth century, to put it mildly."  (p.349)

[jimmy olsen]

I don't think this is accurate though - something HAS changed. The USSC in several decisions has fundamentally altered in a real and practical sense how democracy works in the US, and done so in a manner that I expect really means that democracy simply does not work in the US anymore.


We still have elections, we still have bitter partisan fighting over everything (if anything this is worse than ever), but I am becoming more and more convinced that even the bitter partisanship is mostly all smoke and flash, without any real effect when it comes to the things that have been subverted by money.


It feels like we mostly fight over the outlying issues, the ones that are left after the fundamental ones have been removed from the table. Should we have more or less troops in Iraq? Afghanistan? More of less money for public health care?


But why isn't there any real debate about finance reform? Why don't any national politicians even try to address income and wealth inequality? It is obvious that actual campaign finance reform is a complete dead issues - the USSC has basically said that not only is it "working as intended", even suggesting that it could be reformed is unconstitutional.


So we are left with what feels a lot like a fake choice. You can pick between various political options, every single one of which is bought and owned by the ultra-wealthy corporations and entities that are absolutely required to fund modern political campaigns. You cannot be elected, nor can you be re-elected, unless you have access to incredible amounts of money, and now that corporations are people, and money is speech, the outcome is pretty much obvious, inevitable even. You cannot even really blame the politicians - they are playing by the rules of the game as they exist, and those rules say that re-election and securing the funds necessary for that trump any and all other concerns.


I cannot influence my representatives in any fashion in this regard. I can choose to vote among a set of choices all of which are utterly beholden to those who fund them. So of course there is no choice that can or will go against their interests when the set of people capable of funding them are all those same corporations. It is beyond naive to think that this current system can work any other way.


And this is NOT same old same old. This is new. We have argued for a long time about private versus public funding of elections, but now it isn't private funding of elections, rather it is corporate funding of elections. How can that possibly be workable in anything that we would call a representative democracy that represents anything other than corporations?


Democrat/Republican? It seems to be to be a false choice. It doesn't matter which you choose - either way you are getting political figures beholden to those who put them there.

http://www.youtube.com/watch?v=wlMwc1c0HRQ

[OttoVonBismarck]

The peculiarly American ideology that everyone is a potential winner leads people to make seriously bad choices at the ballot.  This is best exemplified by "small government" types who fear "tyranny" and imagine themselves one day to be subject to severe taxation.

Actually that doesn't represent my beliefs at all. I believe a great many people will never "win", and for many of the same reasons they shouldn't be voting. But there are some middling types that just never get lucky, obviously. But I don't have to worry about being a potential winner, I've made many wise investments--dating a girl in medical school when I was in the Army and earning McWages being one of many.

[alfred russel]

I went back and looked for another passage I thought Berkut would find interesting:

"In the late nineteenth century, in the period known as the Gilded Age, when some US industrialists and financiers... accumulated unprecedented wealth, many US observers were alarmed by the thought that the country was losing its pionering egalitarian spirit.  To be sure that spirit was partly a myth, but it was also partly justified by comparison with the concentration of wealth in Europe... this fear of growing to resemble Europe was part of the reason why the United States in 1910-1920 pioneered a very progressive estate tax on large fortunes, which were deemed to be incompatible with US values, as well as a progressive income tax on incomes thought to be excessive.  Perceptions of inequality, redistribution, and national identity changed a great deal over the course of the twentieth century, to put it mildly."  (p.349)

A wonderful yarn, but I think the rates back then--both for income tax and estate--were significantly less than they are now. How that can be squared with "Perceptions of inequality, redistribution, and national identity changed a great deal over the course of the twentieth century, to put it mildly", with the point of view that somehow we live in the more conservative time seems difficult.

[Jacob]

Indeed.  The question in the United States is to what extent has the distribution of money been subverted by democracy.  And the extent is "a lot," due to people who basically share OvB's beliefs but not his wife's income.

huh?

Poor people voting as if they had the same interests as Otto.

[Zanza]

  Yes, yes it would.  Dramatically.  Gini is something that applies to the whole population, it can't be split up like income.  Any individual's Gini coefficient is 0.

Looking at the definition of the Gini coefficient shows that it wouldn't have a big impact to have a few extreme incomes among a huge population of 300 million. Even the top 1000 ultra high income earners do not command a statistically significant proportion of income when seen as part of the general population of the USA. However, they do earn so much money that they can influence campaign financing significantly.

[celedhring]

Indeed.  The question in the United States is to what extent has the distribution of money been subverted by democracy.  And the extent is "a lot," due to people who basically share OvB's beliefs but not his wife's income.

huh?

Poor people voting as if they had the same interests as Otto.

If you're poor it's your fault. Hence, if you're a proper hard-working and deserving individual - and almost everybody thinks of himself as such - you will eventually be wealthy, and should vote with those interests in mind.