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July 18, 2012 10:17 AM
Phillip Longman Explains American Stakeholder Accounts
Here’s the video, from yesterday’s The Cycle on MSNBC.
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cmdicely on July 18, 2012 10:47 AM:
Like tax-favored retirement accounts -- or the Bush-era Republican health care concept of tax-favored health savings accounts -- ASAs seem to be another public subsidy to the financial services industry. Actually, they seem most like privatized Social Security accounts, with the difference from Republican proposals being that they are required to start earlier and that they add on to, rather than replace, Social Security. Why is it that the one thing that talking heads on the Right and the supposed Left agree on is that the American people need to be compelled to give more money to the financial services industry?
If you want to deal with poverty and savings, the best thing to do is reduce the tax burden on non-rich workers and the people employing them, to encourage employment and allow workers to keep more of the money they earn. People don't fail to save and invest because they don't understand the value of it (well, some do, but that's not the main problem), they don't save and invest because they don't have any surplus income to save or invest. They don't need a mandatory and/or tax-favored and/or directly subsidized way to hand money to private investment firms to encourage savings, they need to be employed and to keep the money they earn.
So, before proposing more handouts to the financial services industry, eliminate the preferential tax treatment of capital-derived income over labor-derived income entirely -- income is income and should be taxed as income. This means both eliminating the special lower long-term capital gains tax rates and exposing capital-derived income to the taxes currently collected only on labor (payroll taxes), allowing capital derived income to be qualifying income for payroll-tax-based benefits (e.g., Social Security) as well. It also means reducing the rates of regular income taxation a the low end enough to remain revenue neutral in the short run given the additional revenue from capital gains being taxed as regular income.
Ron Byers on July 18, 2012 11:11 AM:
Longman's suggestion is nice, but it doesn't get to the heart of the matter. The difference between the very top, and the rest of the society is growing daily. Currently our corporate governence is geared exclusively to reward investors. We really need to figure out how to better reward labor. We need to make sure the entire society, and not just the investor class, benefits from improved productivity and outsourcing.
CharlieM on July 18, 2012 2:16 PM:
Yup, can't wait to give another 4% of my income to an industry that's already played casino with the economy.
I'm sure they'll be much more responsible with a free windfall like this.
If you just can't resist taking that 4%, how about it goes towards T-bills or some other govt instrument and not just a vehicle for more free money for Wall Street gangsters.
tcinaz on July 18, 2012 4:28 PM:
So revise the tax code. (Like they said this is not really possible in today's politics, but it still should happen in a sane future.) Use the system as it exists. (Build profit taking limits into the accounts, that way the investment industry makes limited profits but is still interested in buy-in.) Subsidize up front those who cannot afford 4%. (We already pay much more than that to fund Medicare and Medicaid old age assistance.) Using the system to advantage is not precluded by a simple desire to keep Wall Street from profiting. They already do on every insurance policy in existence, and we accept that as routine. This is at least a discussion worth having and refining.