How did the 1% get so rich? (capitalism, union, free-market, sell)

[Osito]

Tax cuts, foreign bank accounts, money laundering, embezzlement, tax evasion, fraud for some, etc.

[Yosh01]

The income gap is real and unprecedented since the Great Depression, and a direct result of the Reagan tax cuts. I don't believe any serious economist debates this. It's old news and easily documented. Here's one link:

Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show — Center on Budget and Policy Priorities

The problem is that so much cash gets concentrated in the hands of very few who don't have any means of circulating it. The cash piles up and the economy stagnates. It's much better for everyone if the cash is more evenly spread out among the population and put to productive use. This was the model during the prosperous years from WW II to the Reagan era.

[ragnarkar]

Hard Work
Creativity
Living Below Their Means
Investing
Compound Interest

[iowa4430]

So when the "rich" have more money that keeps money from your hands? LOL


I would argue that one of the biggest reasons for the income and wealth disparity lies more in the fact that the non productive in our society are the big breeders. when these people breed, who do they generally breed with and what do they produce?

It is spiraling out of control. Combine that with the class warfare mentality that the "leaders" are putting into peoples heads and it's a recipe for disaster.

[Johnhw2]

The 1% had great ideas that transformed industries and make them wealthy often at the expense of family, spending too much time working and not enough time with the family. Most are smart but also very driven. Mitt is an exception to the family generalization. Smart counts but hard work and goal driven counts more in my view. Taxes have little to do with it.

[mathjak107]

Iowa,Truer words never spoken.

[Yakscsd]

Originally Posted by Pinkmani

Lies you tell... There's no way! That doesn't make sense.

You're saying by donating "huge" amounts to charities, he was able to lower his tax portion by 21%?

ETA: Tax brackets for his income would be 35%.





Well, I beg to differ. If he's taking home money from investments from his corporation, he can use corporate tax write-offs. The less you pay in taxes, the more money you have in your wallet. When the supervisor at my old job doesn't use the whole budget, he gets to take the rest home as a bonus, despite the fact that the place looks like sh*t and is in dire need of repairs.

What would Bubbles do?

[Mr.BadGuy]

Originally Posted by markg91359

Third, it helps us evaluate our tax structure. If someone like Romney is paying 14% of their income as tax, its a clue that we need to revamp our system, so that he and those like him pay more.

Fourth, I will concede there are some people out there who may be guilty of "class envy" as you put it. However, many others aren't envious at all. We'd just like a full picture of what is going on in this country. Some things aren't right and eventually the pressure will build to fix them.

In the 1950s, the top marginal tax rate was 90%. Compare it to the top marginal tax rates of the past 25 years and you will see one reason why a minority of people have accumulated more wealth faster. Next, compare the tax rate of a person or couple who earns $100-200K in "wages" to the tax rate of a person or couple who earns that amount strictly through investments each year. That comparison illuminates why wealth stays within families, and why it is much easier to grow rich through investments, trusts, inheritances, and so on than through W-2 and often, 1099 income. 1099 income is its own interesting discussion, since it's increasingly earned by workers who should be classified as employees. Those people would be paying lower taxes and receiving benefits like healthcare and retirement matching in earlier times, but they no longer do, so their real, net income is massively diminished.

You might even compare the actual tax rates of small businesses, say, those with < 200 employees, to the actual tax rates of multinational corporations. The small business owner pays a massive amount of tax while many of the multinationals receive 7-8 figure tax refunds. I agree, not everyone interested in this topic suffers class envy, although as a child of recent immigrants, I disagree with those who feel that such envy is always a bad thing. Sometimes, people can turn that envy into work to acquire wealth. Over the past 25 years, however, there have been fewer and fewer opportunities to do this with wage income, so you're more likely to grow and stay rich through investments and other passive income streams.

It is useful to understand who is earning the money vs. passing it down from person to person or corporation to person. It is also useful to understand why we transformed from a prosperous nation with a fast-growing middle class to a country where half of all people are low income or poor.

[Mr.BadGuy]

Originally Posted by ragnarkar

Hard Work
Creativity
Living Below Their Means
Investing
Compound Interest

Having worked for several successful small business owners, I agree this applies to them, especially if we define "success" as people who net between $250-750K after taxes, deductions, and expenses. It is not necessarily applicable to families who have generations of super-wealthy people like the Hiltons, Rockerfellers, and Rothschilds. The first family patriarch may well have employed those qualities to grow their fortunes but their heirs in subsequent generations may not have. That's worth checking out to see where the wealth goes, how it grows, and why.

[mysticaltyger]

Here is a good article that analyzes how the top 1% earn their income:

How the Top 1% Generates Household Income

Bottom line:

.....50¢ out of every dollar the top 1% earns in the United States comes from self-employment income, business profits, dividends, interest, capital gains, and rents. The other 50¢ comes from selling time to an employer for salary and wages.