31 thoughts on “October 19 2000”

1. Jörg Kantel October 20, 2000 at 9:00

   weil ja überall auf der Welt Coca Cola hergestellt wird

   Ganz so ist es nicht, während meiner Zeit als Speditionskaufmann hatte ich mal damit zu tun: Atlante liefert Kartuschen mit einem unheimlich fetten, zähflüssigem Syrup und überall auf der Welt wird dann nur das heimische Wasser und die Kohlensäure dazugefüllt.

   BTW: In Berlin ist es übrigens ein Autohändler, der Coca Cola produziert, das paßt recht gut, weil dieser Syrup ungefähr die Konsistenz von Altöl hat.

   
2. Terry Henert October 20, 2000 at 14:27

   Last night I read Jörg’s comment about Coca Cola and then went back and read the threads about Coke from the summer. First, some numbers , compliments of the University of Iowa, College of Dentistry, about a few of the soft drinks and then some comments.

   Brand	Calories	Sugar (tsp)	Caffeine (mg)	pH
   Mountain Dew	170	11.0 (55ml)	55	3.16
   Surge	174	10.1 (50.5ml)	53	2.42
   Coca Cola	145	9.7 (48.5ml)	46	2.47
   Pepsi Cola	150	9.8 (49ml)	37	2.51
   Sprite	144	9.4 (47ml)	0	3.24

   In the US, Mountain Dew is by far the most destructive. Every dentist has seen the scourge created by this awful stuff. It seems that because of the caffein, those who drink M.Dew drink a lot more of it. Many seem to be addicted to the caffein. There is also a lot of evidence that the Dew harms the kidneys and the reproductive process, however there are those who dispute that.

   After reading the comments about Coke in the schools made in July and September it reminds me, again!, of how incredibly conservative and brainwashed we Americans are. Regarding Coke and Pepsi in the schools, it clearly makes good sense to try to protect ourselves and our kids from destructive habits and influences. However, here in the US most have lost the perspective of how much the corporations control our lives (and thoughts).

   The same problem seems to exist regarding our government and elections. Most people readily accept the buying of our elections while in Germany poor Helmut is suffering greatly over a measly million or so! Germany seems to represent a great example of a relatively clean democratic process, while we just seem to give that idea lip service.

   We in the US have been hurt greatly by the easy-to-say “You don’t want government doing anything, and worse … telling you what to do!” statement. We forget that government is also our only protection from some things in our lives, examples, the Coke in the schools and the conditioning that goes with it, unscrupulous marketing, the Firestone debacle, environmental pollution, etc … we can all make a list.

   My main point here is that most of the Western World seems to respect and rely on their governments to perform certain useful functions. Here, that idea seems so “foreign”, mainly, I think, because most Americans seem to know so little about how their own system works and worse, they’re ignorant of how other countries make it work. Many have an illusion of freedom to be the right to be self-centered and inconsiderate, and maybe a “freedom” from the burden of information.

   This started with the Coca Cola topic and then the Coke in the schools, but it is all tied together. It shows a fundamental difference, I think, between the US, the knowledge and viewpoint, and the rest of the Western World. Most Americans have no idea how conservative they really are.

   In zwei woche ich werde in Frankfurt sein. Ich komme für ein langes Wochenende.
3. Sean Floyd October 20, 2000 at 14:34

   Um acht Uhr in die Uni? – Warmduscher!

   It’s even worse than it seems ™:

   Um 8 Uhr bin ich aufgestanden. Uni war um 10. :-)
4. Andrea Frick October 20, 2000 at 16:22

   Ganz so ist es nicht, während meiner Zeit als Speditionskaufmann hatte ich mal damit zu tun: Atlante liefert Kartuschen mit einem unheimlich fetten, zähflüssigem Syrup und überall auf der Welt wird dann nur das heimische Wasser und die Kohlensäure dazugefüllt.

   Na gut. Im Radio wurde es so dargestellt, als würden alle Zutaten bis auf den Aromamix einzeln hinzugefügt und nur der Aromamix sei “geheim”, d.h. die Zutaten, nicht aber ihr Verhältnis ist bekannt.

   BTW: In Berlin ist es übrigens ein Autohändler, der Coca Cola produziert, das paßt recht gut, weil dieser Syrup ungefähr die Konsistenz von Altöl hat.

   Mmm… das hört sich doch gut an! Bäh, ich trinke keine Cola mehr.
5. Andrea Frick October 20, 2000 at 16:48

   Just a little background info: Helmut Kohl, was chancellor in Germany in the years between 1982 and 1998. (Yes, the chancellor can be re-elected as often as he – or rather the voters – want to.)

   Lately, he has been in the media a lot because of a financial scandal. If you want to read about it, I suggest the Kohl and CDU in crisis in the Frankfurter Allgemeine Zeitung, the English edition of one of the most important German newspapers.

   Since the election in 1998, Gerhard Schröder of the SPD (social democratic party) is chancellor of Germany.
6. Jörg Kantel October 20, 2000 at 19:01

   d.h. die Zutaten, nicht aber ihr Verhältnis ist bekannt.

   Das ist wieder richtig – natürlich kennt man die Zutaten von Coca Cola, wozu gibt es mehrere Jahrhunderte Gerichtsmedizin.

   Bäh, ich trinke keine Cola mehr.

   Weiser Entschluß…
7. garret p vreeland October 21, 2000 at 0:22

   i find the terms ‘conservative’ and ‘liberal’ misleading. these are my particular views; take with a large grain of salt.

   a caveat: i have a deep and abiding hatred of the republican party in america for the fiscal idiocy during the reagan era and the cutbacks they made during their ‘contract with america’ tenure. i do not trust them, and i do not trust corporations to look out for my interests or welfare. period.

   republicans, arguably the conservatives, philosophically support the wealthiest (historically caucasian) citizens, believing that you must have a sharply stratified system in order for government to work properly. they prefer to remove constraints to ‘foster growth’, and trust corporations to have the citizens’ best interests at heart. they would like to institute a flat tax. they like to carry a big stick (militarily speaking).

   democrats, arguably the liberals, work to lift up the lower and middle classes (of all races) believing that a less stratified system will benefit more people. they prefer to put constraints at the federal level, to avoid local prejudice and bigotry. formerly they did not trust corporations to govern themselves; this has shifted somewhat since clinton won the presidency. they support a progressive tax system. they prefer a smaller stick (militarily) and prefer to strengthen diplomatic capabilities.

   re: one of the earlier posts … the plain fact is, you *do* want government telling you what to do, where it is appropriate and necessary. a short list of successful (and vital) government ‘bureaucracies’:

   1978 – Federal Emergency Management Agency
   1972 – Clean Water Act
   1946 – Centers for Disease Control and Prevention
   1965 – Medicare
   1965 – Medicaid
   1975 – Ban on Leaded Gasoline
   1975/76 – Ban on DDT and PCBs
   1993 – Reinventing Government/National Performance Review
   1975 – Earned Income Tax Credit
   1990 – Ban on CFCs (Clean Air Act)
   1953 – Bureau of Economic Analysis
   1993 – Brady Gun Law
   1972 – Consumer Product Safety Commission
   1914 – Cooperative Extension Service
   1992 – Direct Student Loans
   1993 – Family and Medical Leave Act
   1934 – Federal Home Loans
   1990 – Food Labelling
   1944 – GI Bill (most of the senators and republicans who complain most about bureaucracy are beneficiaries of this bill, one way or another.)
   1990 – Human Genome Project
   1956 – Interstate Highway System
   1972 – Meals on Wheels
   1969 – Mine Safety and Health Administration
   1993 – Motor Voter
   1967 – National Crime Information Center
   1916 – National Park Service
   1980 – National Weather Service
   1961 – Peace Corps
   1946 – School Lunches and Breakfasts
   1935 – Social Security
   1972 – WIC (food program for Women and Infant Children)

   we are better off, safer, healthier as a nation … because of every single one of these programs.

   in almost every case, the democrats (‘liberals’) protect these programs, the republicans (‘conservatives’) wish to kill, cut back, or ‘privatize’ (put responsibility in the hands of corporations) them.

   why do i mention all this in light of coca-cola in schools? i feel you need to understand it in order to see how ‘conservative’ and ‘liberal’ are defined in america. ‘conservative’ does not mean ‘to conserve’, except in terms of their own bankroll or wallet. ‘liberal’ does not mean ‘generous or open-handed’, except with social programs of their own creation.

   so, the ‘conservative’ move in the case of coca-cola is to allow it to be placed in the school hallways, let the open market deal with the problems. after all, if the parents’ elected representatives, the school board, voted coke in, then coke has legal consent. they have ‘direct’ parental consent to sell a potentially destructive beverage to a captive audience. from a legal standpoint, you really can’t go back and sue them, unless they misrepresented the product.

   so, the ‘conservative’ move is to let the market have free rein; everyone’s responsible for themselves, including corporations. you, and your children’s health, is completely your own responsibility. the government has no business protecting you. [can’t read a food label? you should have attended that ‘faith-based’ intro to reading down at the local ymca … too bad you’ve got pancreatic cancer. tough break. please, don’t breathe in my martini.]

   the ‘liberal’ move would be to put the machines in teacher lounges, and have children bring in a note from the parent to access the soft drink machine. return the control to the parents and teachers directly. or putting all-natural juice machines in place instead of ‘bad-for-you’ sodas. or enforcing a national limitation on the distribution of so-called ‘junk foods’ in an educational environment.

   the ‘liberal’ move doesn’t trust the market; it is aware of human nature. parents do not always defer to what is best for the child, vs. their own needs, short or long-term. you and your child’s health and well-being impact america as a nation, therefore the government has a responsibility to protect you. [can’t read a food label? society has let you down somewhere. let’s see how we can help you, and prevent this from happening in the future. want a hug?]

   so, to sum up, coca-cola in schools will happen … until the first lawsuit hits. or the inevitable ‘study’ comes out linking hyperactivity and violence to soda ingestion. either way, it will end up being tested in the court systems, or the court of public opinion. then the rules and regulations will begin to be hammered out. republicans will foam at the mouth, democrats will feel guilty.

   that’s the polical color of america. conservatives and liberals form just another check-and-balance in the american tapestry of government. both philosophies have good and bad points. they tug at opposite ends of the rope until we end up doing something close to the right thing; it just takes a *much* longer time than it should.
8. Brent Simmons October 21, 2000 at 1:04

   Most Americans have no idea how conservative they really are.

   Actually, I think most Americans realize that, compared to Europe and other developed nations, Americans tend to be more conservative.

   On the other hand, our freedoms of speech and association are closer to the absolute than in other Western nations.

   Abortions are more restricted in Germany than in the U.S.

   France has arguably less strict separation of church and state than does the U.S. (Is the Catholic Church the original multi-national corporation?)

   U.S. immigration policies are remarkably open, at least in comparison to many European nations.

   There’s a stubborn streak of anarchy in the American soul. Thoreau: “That government is best which governs least.” (See Civil Disobedience.) This is the grandfather of the environmental movement talking, one of Gandhi’s spiritual fathers. Is this a conservative or liberal position? Both. Neither. It’s an American position.
9. garret p vreeland October 21, 2000 at 1:17

   Is the Catholic Church the original multi-national corporation?

   i believe so. but now i think it’s the other way around, also. multi-national corporations aspire to be as omnipotent as the historical catholic church … from whom they take many of their business models, whether they know it or not.
10. Sean Floyd October 21, 2000 at 11:36

    On the other hand, our freedoms of speech and association are closer to the absolute than in other Western nations.

    I dunno. In the US, I wouldn’t dare say anything about anybody, because they can sue me for Millions of Dollars, which is not possible in Germany, for example.

    Abortions are more restricted in Germany than in the U.S.

    By law, yes. But on the other hand, doctors who make abortions are not killed by maniacs in Europe.

    France has arguably less strict separation of church and state than does the U.S. (Is the Catholic Church the original multi-national corporation?)

    :-) I guess that holds true for most European countries, and it is a bad thing. But on the other hand, the Dollar bill says ‘in God we trust’ (which I guess is not true for all Americans)

    Sean
11. Terry Henert October 21, 2000 at 21:59

    It seems that at one time less government could function very well, but that was with a level playing field, and money seems always to tilt things. They love to talk about markets but I can’t see how treating everything as a market will ever serve us well. Every country and company has its own model of how they want the market to work so I doubt if there will ever be anything like a “free” market that will work for all concerned. The consumer, or citizen, doesn’t have much representation here. It seems to be increasingly more difficult to hold our ground to avoid being dumbed down and molded into compliant consumers ready for harvest. Besides, there are still so many quality things we need that don’t even involve markets — prevent and conserve, for example, seem so much better than treat and repair … if it’s not too late.

    If we could just get people to see that maybe we need to approach running our country the same way any other viable organism functions. There needs to be some central entity to hold the whole thing together and to make it work, and if they can’t plan, then someone else may do it for them. It might be a brain and nervous system, or the parents in a family, or a group of responsible people who make decisions for a company. Big corporations know the value of organization and planning (they use that approach), but they don’t want our country run that way because an organized, responsible government might object to some of their activities. We’re not asking for all that much — we just need to give the country back its brain, or let it regenerate, rather than to let the corporations run free, and with impunity. Corporations provide some great things, but they proudly tell us that their number one priority is to make a profit. They should function as a part of a coordinated effort to help make the entire country work. If big money rules, we risk having the country look like a chicken with its head cut off, no brain, no direction, no plan, no future. We have to remain healthy in order to have anything to harvest. We can use the eggs but we’d better take care of our chicken.

    Back to Coke and the schools, it’s still part of the same concern. I think we’ll be better off if we keep the public more involved in decision making, planning and funding at a higher level. If this same public were involved long before the money squeeze, the Coke source of money would not have been necessary. The thing is, either way the public is paying for it, but with the money squeeze solution, Coke gets a piece of it. Coke/public money pays for it up front and then the public pays again daily, both literally and figuratively.

    It seems that the only way to avoid these situations time after time is to recognize the value of organization, and seeing the larger picture and have some good people making responsible decisions and planning ahead. After all, we all know that the colonists got together to do just that, and they came up with a pretty good piece of work.

    Oh yes, here’s something you might be interested in. Those bums, the ones with all the money, don’t even pay their fair share of taxes anymore. Take a look at this graph and see what has happened to the excise and corporate taxes since the 1950’s. And take note of who has had to pick up the slack.

    

    Now, if you are wondering where I got this graph — I don’t know … Yeah, great!! I looked all over the place earlier today and I couldn’t find the site. I copied the graph over a year ago. However, all is not lost. One of my searches found this one below. It is not the same, exact time window and the format is different, but it’s close enough to give credibility to both.

    Who pays taxes
12. Brent Simmons October 22, 2000 at 8:50

    Terry — I agree utterly that there are lots of major problems with corporations and their profit-at-all-costs mentality.

    (About me: I’m a liberal Democrat who would consider voting for Nader if the race weren’t so close in my state.)

    I get *extremely* nervous when people start advocating a command economy. These have been shown not to work. (Also, I’d suggest that the country-as-organism metaphor is evil. An organized, efficient government is evil.)

    Rather, the problem is that the government does too much in some cases — it gives breaks to corporations that it shouldn’t. If it did less — no breaks, no corporate welfare — I think we’d all be better off. Corporations would have to pay their fair share of taxes. In other words, the government *is* planning, it’s just that it’s stupid.

    Every government is stupid.

    You wrote: “I think we’ll be better off if we keep the public more involved in decision making, planning and funding at a higher level.”

    That’s idealistic — and unrealistic. Here’s an example: in Washington State the people voted for Initiative 695. In a nutshell, the question was this: “Instead of spending a percentage of your car’s worth on license fees as you do now, should license fees always cost $35?” People said yes, overwhelmingly. Now we have a major transit funding crisis.

    The people will vote themselves bread and circuses until there aren’t any more bread and circuses. That’s why we have a representative democracy. A major problem is that our system of representation is being eroded as our representatives pay more and more attention to the polls — in effect, allowing the people to vote directly for bread and circuses.
13. Terry Henert October 22, 2000 at 13:31

    Brent, I probably didn’t use the right words with my ” public involved … at a higher level” . That was meant to mean:

    1) public as opposed to letting corporate/big money affect the decisions.

    2) having the public elect wise and well-informed representatives (often at the state and federal level — the higher level) to make those decisions which require more information and a broader view of things. This, as opposed to all local control advocated by many, which creates the same problems to which you were referring –popular votes with short-term gains in mind, the same as the Coke in the schools situation.

    Agreed, governments can be awful, but if we don’t make ours work better the big forces will be glad to take over. Speaking of the evils of corporate welfare, I added a graph and a link to 1428 showing how corporations are paying much less than they used to. The European countries seem to do more with less so there should be something we can learn from them. The question which arises immediately is “Can we get there from here?”, or can we even move in that direction, or should we? We, as a country, are so much different from other countries that it’s difficult to predict. I do think that if we had universal health insurance, and if corporations paid more tax as they used to, and there were no special interest money in elections, just to mention a few things, that people here would like it. However, they would probably like the metric system and 220 volts, too, if they’d grown up with it, but not now! So the same problem could exist with any other change. Again, can we get there from here?

    I guess I like the living organism metaphor for a country because I think it suggests that it is something that seems to be alive, responsive, and requires a certain amount of care. It has an identity, a personality and it responds to input from without and within. In fact, I think there have been essays written about this so I won’t go into it here. Using it helps me sometimes when trying to make a point while trying to keep the text from getting too lengthly.

    It’s a very subjective thing, but it seems that the American “quality” of life is slipping and at least part of it is because of people’s lack of involvement in it at the right level and the other is the Cokes of the world being involved too much in it but only for their own gain.

    Regarding our country compared to some others, this link might be interesting to many:

    Compare the US
14. garret p vreeland October 22, 2000 at 19:38

    our government is only as strong and as intelligent as the people who participate in it. if we portray our government as deaf, dumb and blind … who do you visualize as helping it right now, leading it around?

    it’s not the people; we are, for the most part, apathetic. polls, in general, don’t help. i agree wholeheartedly with brent: what is popular is not necessarily right.

    corporate interests are very happy to fill the gap. very happy.

    here’s a for-instance, garnered from my direct experiences in new jersey:

    a developer builds a housing complex. they are not legally bound to reimburse the city or county for the impact they create on the infrastructure. say they put a thousand families on a few acres of land. public sewer, water, and power capacities all must be increased to deal with the added loads. families means children; new schools must be built. school buses bought. groceries and pharmacies must expand or be built to accommodate the increase in population. mass transportation must extend to that development. the developer walks away with millions of dollars, taxes to residents go higher.

    those schools that have been built, they are underfunded because they’re trying to squeak along on minimal tax revenues. the municipality then begins to search for ‘tax ratables’ … businesses that will begin to help support the higher tax requirements of the locale. so they allow mcdonalds, burger king, holiday inn, applebees, the gap, the limited, malls, mini-malls, large corporate conglomerates … to invade their quiet hamlet.

    but oftentimes, these corporations won’t come in *because* of the high taxes. so municipalities will waive the tax for a period of time. and of course, in building the office buildings, new malls and stores, they have no obligation to contribute to the infrastructure (power, water, etc.). the quiet hamlet turns into a sodium-lit commercial strip. everywhere is a parking lot. the corporations walk away with millions of dollars, taxes to residents go higher.

    and when the school board meets next, and the parents are angry and frustrated, the elected officials are trying to make sure they get elected next november … who saves their bacon?

    a good-hearted corporation, coca-cola. and once again, they bear no responsibility for the effect on children’s psychological or physical well-being as a result of this situation. heck, they were even *invited* in!

    i can raise the ante on all this even further, from other perspectives as well. for one, environmental. every office park seems to feel they have to be as well-kept as a golf course. pesticides and other chemicals are spread on a regular basis, often without warnings. they leach into the ground water, killing fish and insect life. princeton used to be lit at night by lightning bugs; you’d be hard pressed to see a dozen on a moist summer evening now. drainage ponds are clogged with algae from the overpopulation of non-migrating canadian geese. lyme disease is rampant because of the overpopulation of deer [lack of predators, and an increase in the bushes and low trees used by landscapers]. on and on.

    our apathy as an electorate is killing us, for real. the corporate ‘free-ride’ has to stop. this is why the ‘bush tax cut’ is another charade to drop the top rates, as was accomplished during the reagan years. lowering taxes on corporations and the upper tiers *does not* encourage growth, nor does it realize any benefits to the electorate whatsoever. it never even came close to paying for itself. it is truly ‘voodoo economics,’ and should remain a footnote in our history … not an option in the 21st century.

    it’s not enough to demonize the corporations; we have a responsibility as well. we can make a difference if we attend city council meetings, school board meetings, zoning board meetings. they are *all* important, because that’s where it all begins. the corporate interests are in your back yard, right now … you just don’t see it. you must make an effort to shut them down on the local level.

    need i remind folks that the moral majority (the christian right wing) used this grass-roots technique to make themselves a force in american politics. they put people in at the lowest levels, school boards and such, and built from there. it *can* and *does* work. you *can* have an effect on government. this idea that we are powerless is hogwash. it just needs consistent and dedicated effort.

    i encourage everyone to drop the weblogging for an evening, and go to a city council meeting. express your opinions where it will do some real good.
15. Terry Henert October 22, 2000 at 20:06

    Garret

    Great comments from you and Brent. I wish more people were listening. We need much more intelligent involvement from people at all levels of the process. Do you have any ideas as to how, at this stage, we can get more people involved? Some countries require voting but I can envision a horrible backlash here against something like that. It would probably be interpreted as a threat to their “right” not to participate.
16. garret p vreeland October 22, 2000 at 20:45

    i talk within my immediate social circle about being more involved. ‘you can lead a horse to water, but you can’t make them drink.’ if people think gore was bad during the debates, they should come hang out with my friends and i during political/philosophical discussions. i’m afraid we’d trample poor al.

    voter and constituent participation has been a problem for a long time. my gut feeling is, since the beginning of the industrial revolution, especially. i have no facts to back that statement up; just an instinct. probably wrong.

    it’s a vicious circle, i think … people don’t vote, because they feel they have no voice. they have no voice, because they don’t participate in local government.

    i have a lot more to say, tied in with education and character issues, but i have to go out for a while. i’m thinking along the lines of ‘the courage of your convictions.’ we have to have a president; not to vote is to voluntarily gag yourself for no good reason.
17. Eric Soroos October 23, 2000 at 0:23

    I would argue that Excise Taxes are not paid by corporations.

    Excise Taxes are passed along to the people buying the goods being taxed. They are effectively distortions of a market to prop up the profits of domestic companies. (in the case of import excise taxes.)

    I would note a couple more things here (US):

    Taxation is at an all time high, as compared to gnp (20.5%). We are at levels not seen since the world wars.

    The ‘surplus’ that the government is falling over itself to spend is largely due to this high tax rate which is influenced by bracket creep. (Bracket creep is where the tax rate change points don’t track inflation/cost of living)

    eric
18. Terry Henert October 23, 2000 at 1:39

    Eric

    That’s correct. My understanding of it is that it is essentially a use tax on items purchased. It is applied to many things, some necessary, some not so necessary, including some real luxuries. It’s even on some of my utility bills. There are many, many links on the internet describing it but this one is pretty straight-forward and brief. According to this link, in 1998, 59% of the excise tax collected was on alcohol, tobacco and gasoline. I don’t know if certain drivers, like truckers, for example, get any special deals.

    Some of these excise taxes affect the corporations indirectly and others –probably not. The thing I noticed was that the slack for both taxes had to be picked up by the social security tax. So everyone working, including the non-drinking, non-smoking, no-frills buyer with only a modest car, if he/she has one, is paying for it. Still, the portion that really annoys me is the corporate tax.
19. garret p vreeland October 23, 2000 at 19:51

    i’ve been looking for income tax vs. gnp numbers, but have been unable to come up with anything ‘readable’.

    i did find this, however:

    “Federal income taxes at lowest in decades — The federal income tax burden is at its lowest in 40 years, according to a series of independent studies, the Clinton administration, and two Congressional measures. Most Americans will pay less than 10 percent of their income in federal taxes. The Congressional Budget Office estimates that the middle fifth of U.S. families paid 5.4 percent in federal income tax in 1999, compared with 8.3 percent in 1981. The Treasury Department calculated a four-person family, with the median income of $54,900, paid around 7.46 percent of that in income tax, the lowest since 1965. The conservative Tax Foundation estimated the median two-earner family, making $68,605, paid 8.8 percent in 1998, about the same as 1955. Due to an expansion of tax credit to the working poor, and for children and education, more than one-third of eligible taxpayers pay no income tax, according to Congress’ Joint Committee on Taxation. The CBO estimates the top 1 percent of families, those with an average income of $719,000, paid 22.2 percent in taxes, which is still far from the 39.5 percent top rate. (“Federal tax bite is at a 40-year low, reports suggest,” March 27, 2000, The Washington Post)”

    comments? this sounds a bit like they’ve cherry-picked the best numbers … still, i intend to dig for the actual reports …
20. Eric Soroos October 23, 2000 at 20:46

    Some of these excise taxes affect the corporations indirectly and others –probably not.

    One of those is the tax break on ethanol. Basically goes directly into the pockets of Archer Daniels Midland. Ethanol is used as a gasoline filler in the midwest (gasahol)

    Another is the tax breaks on alternative fuel vehicles. That means that in effect, the people are paying half of the cost of running some of these vehicles.

    The thing I noticed was that the slack for both taxes had to be picked up by the social security tax.

    That’s not quite accurate. What you’re not seeing is how much the total tax pie has expanded.

    Social Security is basically a ‘pay as you go’ plan, disguised as a pension plan. Current recipts are used to pay current liabilities. Pensions invest current reciepts for future liabilities, so that the magick of compound interest can make them less burdensome.

    If the SSA is evaluated on the basis of a pension system, it is completely and totally underfunded. If you look at the returns based on a pension system, they generally suck. Right now, I’d be better off throwing money in a mattress and waiting for 40 years of inflation to reduce it to nothing than to expect anything back from social security. It’s that bad. In fact, I view it as a cruel joke to anyone under 40 years old.

    What’s been happening is that SSA benefits have been expanding, and the pool of avalilable workers has been shrinking relative to the retired population. So the marginal tax rate on earnings to the SSA has risen from 2% at the beginning of that graph to the current 15% payroll, and 8% from the paycheck.

    This is why the current presidential candidate’s proposals don’t make any sense. #1, There is no such thing as a lock box. Congress will spend any money it sees fit. #2, Allowing me to invest a portion of my SSA taxes, while nice for me, ignores the fact that the SSA is not a pension plan, and probably never will be.

    Still, the portion that really annoys me is the corporate tax.

    I’m not sure why. Corporations pay tax on their profits. Then they pay out their profits as dividends. They get taxed again. (Incidentally, this is why Microsoft will never pay a dividend. 1/4 would go straght to Bill, who would have to pay income tax on it. )

    Unless they don’t pay dividends; then that money goes into the value of the company, which the government gets as capital gains when individuals sell the stock of that company. Or they don’t get when individuals give the stock to charity.

    eric
21. Eric Soroos October 24, 2000 at 5:24

    i’ve been looking for income tax vs. gnp numbers, but have been unable to come up with anything ‘readable’.

    The numbers that I saw recently were in the WSJ in the last week or so. The ones that stick in my mind are that the top 1% income earners pay 19% of the income taxes, and the bottom 50% pay 4%. And when they say income taxes, they’re excluding the other 60% of what the government takes in. Also note that over the periods that they’re talking about, SSA taxes went from 2% to the current > 8%. I’d also note that capital gains sare probably included in those numbers, and that those marginal tax rates are lower than the income taxes for qualifying investments.

    From my own personal experience last year (professional salaried work all year, ~10% additional in programming consulting, buying a house and all that goes with it, single, income less than the median family listed above), taxes are a pain in the ass. Basically, the marginal rate* on the consulting income was something like 40-45%, and that’s in a state that doesn’t have income taxes. Trying to write off some equipment purchases for that job was a nightmare. I’m an engineer, I’m not afraid of calculation, but their directions and rules were opaque.

    And even with buying a house and slamming money into a 401k, I’m at an overall (income) tax rate of about 12%. Granted, I’m not a family(as above), but I’m in a high cost area. Add 8%+ for fica, 8.7% of what I spend on sales taxes, and 5% in property taxes. (last two are local/state) I’d estimate that over a quarter of my income went to taxes of one form or another. And that’s just the taxes that I notice.

    In hindsight, I would have been better off to do some of the consulting for free. The tax regulations (tax rates and cost of compliance) are basically discouraging me from doing that sort of work again, since they take so much of what I’d make. I’d argue that this is not really a good pressure for the tax system to be exerting.

    * marginal rate is the rate on the last dollar of income, in this case, 40% means that I keep 60 cents on the dollar. High marginal tax rates encourage avoidance behavior.

    eric
22. Terry Henert October 25, 2000 at 13:36

    Eric, do you think the expansion of the total tax pie that you mention justifies the reduced percentage of the total tax that corporations now pay? Of course we could write volumes on this but in trying to keep it somewhat concise (risky maybe) — it still seems that the corporations are getting a very good deal here. Corporate welfare is government spending. Tax cuts are government spending. It’s spending the conservatives don’t seem to mind, of course. And they don’t seem to mind taxing a city to build a new sports stadium, either. However, there is very often resistance to spending that helps Average Joe. That money goes right back into the economy; average Joe spends it. When money flows into, or stays, in places where there’s already a lot of money, it seems to be used mostly to help make more money. There was a time when accumulation of capital was needed but now there seems to be plenty of capital available, but the middle class is disappearing.

    This relates to the present tax cut proposal debate going on in the election campaign. The fact remains that the half making less than the household median of $54,900 is more concerned with what they have left to live on after taxes. Those with much higher incomes who, admittedly, pay much more in taxes, are not going to get much sympathy when every one else compares how much they still have left to spend after paying those taxes.

    The fact is, of course, that we pay for everything we have, either as a direct purchase, “free” services provided through advertising, or by our taxes, to name the most common methods. The main things in contention are always who pays, and how much, how much control do we have over what we pay, and what effect does it have on the functioning of the system.

    It’s very easy to see taxes because they are so visible, and it’s not so easy to see the corporate welfare. However, it’s also not so easy to see that it’s the consumer who is really paying for those huge sums spent by Coke and others for media television and school expenses (our thread!) just to name two. It’s disguised a bit but it functions as a use tax. They will disagree and call it one of their operating expenses, and that their marketing increases the sales so that the product is cheaper, thereby not putting the burden on the consumer. However, it’s just another cycle for money. It’s simply another way to fund things, and that used to be ok. It took a large amount of money to get broadcasting, for example, started, and that’s how we built the country. It’s just that the consumer doesn’t have any say in how Coke spends that ‘tax’ money or about which media or social programs Coke sponsors. And Coke will still be in the schools promoting their product and conditioning the kids, and dictating the soft drink choices there, and people will still be sitting around watching those damn commercials. I’d much rather support a few public broadcasting stations, and the schools, and pay for them.

    In fact, with broadcasting, we could probably go pay-per-view for everything now and get rid of advertising. The technology seems to be here. Heaven! (It won’t happen.) My friends in Germany, whom I’m going to visit next week, said they were laughing back in 1985 about how awful the American system of commercial broadcasting was and about all the junk that comes with it. Well, they’re not laughing anymore. From what I hear, commercial broadcasting is growing in Germany, and I suspect it is also growing in many of the other countries. I would like to hear from some of the European readers about what the situation is there and what they think about it.

    Back to this topic, I suppose there will never be total agreement on which numbers to use for analyzing our present tax situation but all numbers seem to indicate that the US still has close to the lowest taxes of any of the industrialized nations. And as Garret pointed out in his first posting, many important programs have been created by government and I doubt if many of these provisions would be in place if our government hadn’t made those decisions.

    Here, too, I’d like to hear what the Europeans have to say about this. I’d like to know how they view their own tax system and the benefits they get from it, and how they view the American system and how they view what we have become, both as people and as a nation. How involved should their governments (or ours) be in their country’s decisions and also what they think most of their countrymen would say about this?

    One more thing, and maybe this should be a separate thread, but it really relates to this one. I’d like to know if most Europeans, if they had the opportunity, would come to live and work in the United States or if they would prefer to stay where they are. It seems to me that everyone around me, where I live, thinks that the whole world wants to come here, but I’m not so sure.
23. garret p vreeland October 25, 2000 at 18:26

    the problem with getting numbers and stats from the internet (or from any other source), is that you can validate almost any opinion. there are conservative groups, there are liberal groups. one has to make a judgment call.

    here’s an interesting quote i ran across, up for comment:

    “Americans are now working longer hours and producing more than at any time since World War II, but all the gains are going to their bosses. Writing in the Summer 1995 edition of The American Prospect, Edward N. Wolff states that according to data gathered in federal surveys, the wealthiest 20 percent in the U.S. received 99 percent of the total gains in the economy between 1983 and 1989. During that same period, the richest one percent picked up 62 percent of the new wealth that was created. From 1989 to 1992, that same group got 68 percent.

    During the prosperous 1950s and 60s, the super-rich one percent held about a third of the total wealth and the highest federal tax bracket was 91 percent (lowered to 71 percent in 1962). Wolff writes that the slowdown in growth that began in the 1970s was accompanied by a rising inequality in both income and wealth. The higher the levels of inequality, the greater the likelihood of social unrest.”

    another interesting stat, that i have to find an online source for, is that during the reagan years, the aggregate growth in the economy was not equal across all income brackets. the wealthiest rose, and the middle and lower classes sunk … significantly.

    if we’re going to grow, i think it’s only fair we all grow together … not one at the expense of another.

    i also ran across a brazilian link that is comparing tax systems, has some interesting graphs on america. it showed, if i remember correctly, that corporations pay only 10% of the overall tax burden in america. individual taxes are by far the most important factor in keeping our country solvent at the moment.

    i’ll dig around and see if i can find it …
24. Andrea Frick October 25, 2000 at 20:50

    Terry Henert:

    “My friends in Germany, whom I’m going to visit next week, said they were laughing back in 1985 about how awful the American system of commercial broadcasting was and about all the junk that comes with it. Well, they’re not laughing anymore. From what I hear, commercial broadcasting is growing in Germany, and I suspect it is also growing in many of the other countries. I would like to hear from some of the European readers about what the situation is there and what they think about it.”

    It’s true. We used to have public TV stations in Germany (ARD, ZDF), but during the last 15 years or so, many new TV stations have come up, and they are all private and financed by advertising. The public stations have advertising, too, but not as much as the private ones. On public TV, there are no ads after 8 p.m., I think, and they normally don’t interrupt programs more than once. The private stations advertise like your average American station, I think. (I have to admit that I may not be up-to-date with this because I haven’t owned a TV set in the last three years. So really, my experience ends in 1997.)

    The difference between German and American TV stations was still quite noticeable in 1992, when I spent five weeks with an American family, where I occasionally watched TV and was annoyed by the frequent breaks for ads. But I’m afraid German TV advertising has gotten worse since then.

    Terry Henert:

    “One more thing, and maybe this should be a separate thread, but it really relates to this one. I’d like to know if most Europeans, if they had the opportunity, would come to live and work in the United States or if they would prefer to stay where they are. It seems to me that everyone around me, where I live, thinks that the whole world wants to come here, but I’m not so sure.”

    Difficult question. I don’t think so many people really think about emigrating to the US. Why should the thought occur to them? True, we have a pretty high unemployment rate in Germany at the moment, but I don’t think people would consider emigrating to the US because of that. Since it seems to be difficult enough for a lot of people to move to a different town in order to get a job, I doubt they would move to another continent.

    It’s a bit different for, say, scientists. The US universities have a very good reputation for physics, mathematics and the like, so I guess quite a few people from Germany would consider moving to the US. But I don’t know how many of them want to emigrate, and how many are happy to spend a few years in the US studying or working on research projects, and then come back to Germany.

    I would say that many Germans think the USA are a very open and liberal country, in the sense that everybody can start as a kitchen boy and become a millionaire – The American Dream. And true, it might be easier than it is in Germany, where we have an elaborate education system. (After school, a three-year education is required for almost every job over here, where you work at a company, go to school one or two days a week and get paid very little. If you don’t do this, you will not get a “proper” job.) But I don’t think that the USA are paradise, and I don’t think other Germans think that.

    Last but not least, from recent news and things happening in Germany, I get the impression that many Germans are xenophobic, and no xenophobe would think of going to a foreign country and start a new life there.
    
    But the whole business about Ausländerhaß is another topic, which I don’t want to discuss in this thread.

    It would be interesting to see some numbers – how many Germans emigrate to the US, how many to other countries, how many immigrants are allowed into the USA from different countries… I’m searching the net.

    All I could find so far is this: (Source: Infoplease.com.)

    Number of people who immigrated to the USA from Germany

    Years Number 1941–50 226,578 1951–60 477,765 1961–70 190,796 1971–80 74,414 1981–90 70,111     1996 6,748

    Years Number 1820–1940 6,021,951 1820–1996 7,105,301

    Note: Data for Austria-Hungary not reported until 1861. Austria and Hungary recorded separately after 1905, Austria included with Germany 1938–45.

    I don’t know whether you can tell anything from these numbers. There were many during World War II, which seems reasonable, but even more during the 50s. Since then, ne numbers seem to have decreased. But of course there are always different reasons for emigrating, and of course the numbers don’t show how many want to emigrate, but can’t.
25. garret p vreeland October 26, 2000 at 0:56

    from the congressional budget office, check out table 3-2, the disparity between corporate tax and individual tax. it’s a bit shocking, giving good ammunition for ralph nader and his call for the end of ‘corporate welfare.’

    when a chief executive officer’s income is 150 times that of his workers … is it right that corporations go off scott-free when the taxman comes?

    another link, showing the historical trends between individual and corporate tax, and excise taxes. interesting.

    it’s long, but here’s ralph nader’s testimony on the subject of corporate welfare. a shocking read, esp. about taxol, the pharmaceutical.
26. Eric Soroos October 26, 2000 at 8:07

    Eric, do you think the expansion of the total tax pie that you mention justifies the reduced percentage of the total tax that corporations now pay?

    I think that what we see ‘corporations’ paying is money that consumers are paying, + some processing fees, transaction costs, and additional dealer profit.

    Just because the money is hidden in the cost of goods doesn’t mean the comsumer isn’t paying it.

    Having said that, the tax law is so complicated that if you gave 30 different honest accountants the same company, you would get 30 different amounts of tax owed. I’d like to pass a law that stated that any time a tax law was passed, the total volume of tax code had to decrease by 10%.

    . And they don’t seem to mind taxing a city to build a new sports stadium, either.

    It’s spending, it creates jobs, bla blah blah. Look at what congress is passing right now, so that they can go home and get reelected.

    Yes, the government wastes money. That’s why I’d rather they have less of my money to waste.

    However, there is very often resistance to spending that helps Average Joe. That money goes right back into the economy; average Joe spends it.

    The Average Joe would probably be better off with $100 of a tax cut in his pocket right now than to have the government spend $50 on some congressman’s district and pay him $50 next year some time if he spends the proper 15 hours pouring through the tax forms and has the right lifestyle choices.

    If Gore’s proposal passed, the marginal tax on Joes income could be anywhere between -50% and 150%. At certain points in the income distribution, Gore’s tax cuts actually make it so that you owe the government $1.50 on the next dollar you make. And those points are not at a high income. Gore’s policy is bad tax law. It perpetuates the notion that the government knows best, and that paying certain people to perform certain actions (put their kid in day care, go to college, find $1k to save long term from their 20k take home) is somehow in the greater good of the country.

    And the thing is, lowering the marginal tax rate on the top tax brackets tends to increase the amount of taxes collected.

    Examples from WSJ, 10/24/00, p A26, (op ed page, titled “To Soak the Rich, cut their taxes”, from Aurthur Laffer and Stephen Moore)

    Share of taxes paid by incomes over 50K:
       1921: tax rate: 73%,  share 44%  
       1925: tax rate: 25%,  share 78% (total collections doubled)
    
       1963:  rate: 91%  share: 12% (Kennedy)
       1966:  rate: 70%  share: 15% (total collections up 50%)
    
    Share by top 1%  (Regan Tax Cuts) 
       1981:  rate 70%  share: 17.6%   
       1988:  rate 28%  share: 27.5%  (revenue growth 30% better)
    
    Capital Gains Tax
       1996: rate: 28% revenue: 62 billion
       1999: rate: 20% revenue: 110 billion (est)
    

    I have also seen numbers from a couple of years ago that tracked the mobility of individuals between the various income levels (in 20% units). The conclusion of those numbers is that individuals move in and out of income groups, and that only about a quarter of any given group are in that group 10 years later.

    The government does not have a right all that the country produces. They have a responsibility to provide some services, excersize stewerdship while doing so, and the power to collect money to find those services.

    Current congressional actions show that the government has the obligation to spend all of the money that it can find, and then raise taxes when that’s not enough.

    eric
27. Alwin Hawkins October 26, 2000 at 8:35

    Not to stray back to the original subject or anything…

    But there is an article on Campus Pop Pushers on Intellectual Capital this week.
28. Terry Henert October 26, 2000 at 20:32

    Alwin,

    Not to stray back to the original subject or anything…

    Good point, and good link, too.

    This has evolved into something which I suspect is starting to look more and more like the election debates of which most readers have been getting their fill from the media, I suppose, particularly if they are in one of the battleground states. It’s worth noting, however, that these comments, all of them, have been much more substantive than the stuff coming from the Schwachkopf and the Drache as they race around the country. And it’s been very civil, too, … a credit to Andrea and her readers.
29. garret p vreeland October 26, 2000 at 22:10

    art laffer is a questionable source for information, imho. it’s his ‘laffer curve’ that got us into deficits in the first place. [i wonder, if the curmudgeon is reading this, if he could tell us what the rep for laffer currently is amongst scholars. the american economic association, at the time of reagan’s election, had very few proponents of supply-side theory. very few. i wonder how many currently are supply-side converts?]

    to judge the past, i suggest a read of the atlantic monthly, the interview with david stockman, for a start on supply-side economics and what happened … from the man who ran it all. disturbing that an untested economic theory could be used to run a country. ‘the magic asterisk’ indeed.

    then i’d suggest the testimony of william gale, of the brookings institution, before the senate on january 20 of 1999, to help predict our future course. i found it very balanced and accurate, and the brookings institute is recognized by most as being non-partisan.

    as far as gore/bush economic plans, i think we’ve got a lot of bait and switch going on. some excerpts from the above link, my emphases:

    “although previously announced fiscal surpluses were located entirely in the social security trust fund, there is a growing possibility that the non-social security portion of the budget will show significant surpluses in the near future.”

    bush wants to give us a tax cut based on success in our social security trust fund? gore wants to put social security in a ‘lock box’, but wants to spend the surplus?

    huh?

    “across-the-board tax cuts would provide a short-term spending stimulus and might thereby help ward off an economic slowdown. However, people are already spending essentially all of their income–the personal saving rate is zero. The grounds for stimulating consumption further seem weak. In addition, cashing in the surplus now with a major tax cut could spook investors’ confidence in any sense of budget discipline. If so, this would raise interest rates and hurt the economy.”

    i don’t even need to comment on this one. i think an investigation into how to spur individual and family investment would be a good use of money.

    “relative to other countries, our tax burdens are fairly low. Of the 29 countries in OECD, in 1995, the United States had the fourth lowest ratio of taxes to GDP. Only Mexico, Turkey, and Korea have lower taxes as a proportion of GDP. In 1996, estimated total government receipts were 31.1 percent of GDP in the U.S., the lowest level of any of the twenty largest OECD countries.”

    i think our german friends are going to tell us to ‘put a sock in it’, from a tax to GDP perspective. what have we got to complain about?

    after looking at all the charts, i believe unusually low energy prices are the key to our prosperity. our ‘surpluses’ are not due to reagan, bush or clinton. we’ve been riding high on unpredictably low energy prices since the end of the gulf war. we won’t be so lucky in the future. it’s past time to invest in alternative fuel sources: solar, wind, fuel cell, etc. it’s just too important to allow such an important source of our prosperity to be subject to the whims of middle eastern politics.

    and what does all this have to do with coca-cola? just that i’m going in to the kitchen to fix myself one right now … with ice, and a lime.
30. John Marden October 27, 2000 at 21:59

    I’m reading it. I haven’t heard talk of Laffer for years, although I’m not that clued in to the economists.

    My impression was that the Reagan administration didn’t really care whether the Laffer curve was true or not. They just wanted to cut domestic spending, so the best way would be to cut taxes, and eventually congress would have to cut spending.
31. garret p vreeland October 28, 2000 at 0:48

    thanks for the info, john!

    plus, i just have to add this link:

    uses for cola, from a do-it-yourself site.

    hard to imagine i’m drinking toilet bowl cleaner …

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