We don’t get the connection. We don’t think that UBS Warburg gets the connection either.

We of the Middle & Working Class don’t get UBS at all, Mr. & Mrs. Reader. Our average IRA/401(k) was cut in half when the stock market tumbled from a Dow of 14,093.08 on October 12, 2007, to where the Dow Jones Industrial Average is now, i.e., hovering around 7,000.

We think that President Obama is absolutely correct. That is, in his remarks last night he said that the wealthy few are simply going to have to pay higher taxes. He has drawn the line at taxable incomes above $250,000.

Okay, that takes care of the line in the sand.

Now the question is what will the top marginal rate being increased to? It was lowered to 70% from 91% in 1964. Messrs. Reagan, Rostenkowski, Stockman, O’Neill and others of the so called Reagan Revolution lowered the top rate even further to 50% in 1981, and then to 28% in 1986.

That’s when the progressive tax system was flat out broken.

George H.W. Bush attempted a repair in 1990, raising the top rate to 31%. Bill Clinton went further in 1993, raising the top marginal rate to 39.6%. Something clicked and the deficit was gone by 2000. The U.S. Public Debt was being paid down, and the Social Security Trust Fund ceased to be raided to mask the annual federal budget deficit.

Unfortunately, George W. Bush and William Marshall Thomas reversed course and lowered the top marginal rate to 35% in 2001. Now we’ve got a $3 trillion deficit, a $5.6 trillion FY 2009 federal budget & a $13 trillion U.S. Public Debt. The U.S. Public Debt at the beginning of the Reagan administration in 1981 was $1 trillion (about $2.3 trillion after inflation today). The annual budget in 1981 was a mere $700 billion ($.7 trillion)…jumping to $3.1 trillion in FY 2001…even before adding the bailout, the stimulus & Mr. Bernanke’s toxic waste buyout program (the additional $2.5 trillion altogether).

Yet even with such a mess, the Privileged Class doesn’t want to even pay the Bush top rate of 35%…so here comes UBS for wealth management and tax avoidance. Wow!

The original ratio of bottom marginal rate to top marginal rate in 1913′s first tax rate schedule was 7:1.

That’s what America needs again. The top rate should be 1964′s 70% and the bottom marginal rate should be 10%…thus 7:1 again, i.e., the 15% and bracket should be merged with the 10% bracket and a “line in the sand” on the bottom end of the scale being $250,000 (at most $300,000).

OKJackGroup
oklahomajack.com

The 1999 GLB Act removed the firewall between deposit and investment banking that had been in place since the (Senator Carter) Glass-Steagall Act of 1933, the latter being the commonsense response to the Stock Market Crash of 1929. The firewall was still in place, of course, when the market fell in 1987.

This UBS issue is all about so called “wealth management”, but is alleged to include “tax avoidance” by “hiding income and assets” from the IRS overseas.

OK Jack
oklahomajack.com