Rich Get Rich and Poor Get Poorer

That's the classic "trickle down economics" argument: give more to the people at the top, and they will hire more people, pay higher wages, give better benefits. The problem is, it doesn't work that way. Since 1965, the compensation of CEOs of major corporations has skyrocketed, while the wages of the average workers has actually dropped. In 1965, the ratio of CEO salary to factory workers' wage was 44:1. Now it's about 200:1. CEOs don't share, and the wealth isn't "trickling down."

As for taxes, the guy making 20 million probably makes a good part of it as dividend, not wages. The tax on dividends is 15%, not the 35% we workers pay on our salaries. Basically, we're penalized for working hard; they're rewarded for investing. But most of us workers don't have that kind of money to invest where it would make a difference. That's a bonus for the ultra wealthy.

As for social security, it's the only way most of us can retire, AND it's guaranteed. I lost my job a couple of years ago, and had to sell some stock immediately. At that point in time, it was 35% LOWER than what I paid for it. But I needed the bucks, and took the hit. Good thing I didn't have to retire at that time. And BTW, it was a blue chip--no amount of investment "classes" would have "educated" me enough to avoid that.
 
Why were the biggest increases in the deficit during Reagan's term and Bush #1's term. I'm not saying tax the heck out of people. I'm saying if you cut taxes cut them across the board....why do the rich deserve more of a tax break, because their rich....i don't think so. Don't we also try to fight against poverty and other ill effects of life....you cut taxes other programs suffer and the first ones to suffer are those that help the poor and education....is that fair....only the rich can have an option to go to school. Cut taxes you cut these things....is that what you want. Even Greenspan is warning that the trade deficit and the national debt have to stop growing at such a substaintial rate.
 
Flying Crane said:
because someone who makes $20 million per year can afford to pay 90% much much much much much much easier than someone who makes $20,000 can afford to pay 10%. People who make this kind of money usually have made it at the expense of lower-paid workers. Without those workers, he would not have made $20 million. He should shoulder a much greater share of the tax burden because he has reaped a much much much much much greater share of the profits. It is time for people to stop hoarding.

Keep in mind, by my plan, he would only pay 90% on the amount exceeding $10 million. The lesser amounts would be taxed at lower rates. His actual net income would be $4,149,998.80, not including the first $250,000 gross income that would be taxed at a lower rate. For the sake of argument, let's say this amount is taxed at 30%. This gives him a total net income of $4,324,998.80, if his annual gross income was $20 million. You don't think this is enough?

Now, the percentages that I threw out were pulled out of my butt in a hurry. They were used just to convey the idea. Maybe they would be adjusted, but this is the type of tax system that I think would be somewhat more just and fair. Someone making $20 million per year certainly qualifies to be counted among the super-wealthy, and I think he should shoulder the burden.
You have got to be kidding me! Because Dr. Joe has more money than you he should be forced to get rid of 90% of it? Thats the most asinine and absurd thing I've ever heard. You can give no more reason to steal 90% of someones money than, "They can afford it"?

Wow, I can't believe what I'm reading. Your offering to punish those who suceed while still managing to attack the minorities (those who make that much money). Its not anyones place to tell me or anyone else how much money is "enough". Wow, I dont even know what to say but wow.

7sm
 
7starmantis said:
You have got to be kidding me! Because Dr. Joe has more money than you he should be forced to get rid of 90% of it? Thats the most asinine and absurd thing I've ever heard. You can give no more reason to steal 90% of someones money than, "They can afford it"?

Wow, I can't believe what I'm reading. Your offering to punish those who suceed while still managing to attack the minorities (those who make that much money). Its not anyones place to tell me or anyone else how much money is "enough". Wow, I dont even know what to say but wow.

7sm

in this example, $4.3 million net, per year, isn't somehow enough? I'm just talking about some basic social responsibility. When do the ultra rich have enough? I would actually like to see them recognize this on their own and decide to stop taking compensation, or at least drastically reduce it. And based on this example, with the graduated tax rate, this is really closer to 80% overall, not 90%.

Why does this nation think that the ultra wealthy need protecting? They aren't setting a place at their table for you, my friend. They won't let you join their ranks.
 
mrhnau said:
first, why did he make that money? more than likely its not been "given" to him and he worked his butt off to get into that situation. Those "lower paid workers" are likely to include many readers on this board. You tax 90% of the empolyee, guess who is going to feel the crunch? the employees. Can't hire as much as a business owner.

What does this guy do with his cash? reinvest it in his business? thats great for the business and he can hire more employees. Buy a yatch? not likely, but if he does, who made that yatch? how many people did he indirectly employ to build it? does it have a crew? aren't those employees? Buy a mansion? Who built it? Those things don't just magically appear. I imagine a broker made a nice penny off of the sale too. Buy nice cars? Good for GM, which employs a large amount of people.

so, the "hoarding" you refer to is not hoarding at all... do people stick it in the bank? I doubt it, but even so, its employing people at the bank. stocks/bonds? he is supporting government/business.

I've got a mental game for you to play... imagine everyone in the world has -exactly- the same amount of money. you give everyone 1 million dollars! Now, go down the road 5 years and tell me where the money is. Its going to be back in the hands of the people who had it in the first place! Its the people who have the guts to take the risks, the people who have the knowledge that they need an education and the people with the drive and hard-work attitude that are going to do good and get it all back.

This is part of what made our country great... I would despise seeing something like this 90% tax you propose, it would strangle many of those "horrible" people and companies that made this country as great as it is. On the other hand, they might just spend more on tax attorneys to figure out a way around it LOL

btw, I'm not rich, I'm pretty broke. However, I don't plan on staying that way my entire life. Neither does any small business owner. I don't care to crucify them for their success.

btw, they "rich" already shoulder the bourden, paying the lions share of the taxes. This is part of what I find funny when people complain about tax cuts for the rich. statistically, they are the ones paying most of the taxes! btw, the Bush cuts cut taxes on everyone, not just the rich.. we can argue that is you want... This is class warfare at its finest.

MrH

Keep in mind, I am not talking about their business assets that they have, as a business owner. I am talking about their private personal income and assets, which come in after all business expenses have been paid. I am talking about the CEOs of the big companies who are paid bonuses of tens of millions of dollars, in addition to a multi-million dollar salary. This is all personal, private wealth that is cycled back into the economy only very sparingly. And these are also the people who can take advantage of every tax loophole that exists. They often actually pay a lower tax rate than the middle class.
 
Flying Crane said:
What I would do is tax the wealthy and the super-wealthy on a graduated rate, for income over certain amounts. for example:

income of 250,000 to 500,000, tax at 40%.
income of 500,001 to 1million, tax at 50%
income of 1million and 1 to 5 million, tax at 65%
income of 5million and 1 to 10 million, tax at 80%
income of 10million and 1 and over, tax at 90%

No, way, don't even think about it. Really, I despise the neocons as much as the next guy, but confiscatory taxation takes the life out of an economy. The United Kingdom tried this in the post-WW2 era and they ABSOLUTELY destroyed their competitiveness by doing so. A number of productive people with dual British citizenship renounced their citizenship and returned to their native lands.

Forcibly redistributing the pie doesn't make the system more equitable because it shrinks the size of the pie.

I think the real issue are the subsidies and large tax write/offs given to large corporations that are already making record profits. Again, there is nothing wrong with making a profit - just don't give an already profitable industry a special tax break while at the same time raising education costs and making education grants and loans more difficult to obtain. That is eating your seed corn and will ultimately diminish our competitiveness.

I would like to note that the gruesome working and living conditions in early industrial Manchester, England that so angered Marx and Engels had largely disappeared fifty years later and the people there ended up with a far greater standard of living than they had in pre-industrial times - with its famines and unavailability of finished goods. On the contrary, the redistribution ideology they championed caused Russia wide scale want, famines and bloodshed.

No, the answer, IMO, is to promote an industrial and education policies that favour BOTH the working class and the wealthy. Right now the middle class is being reduced by an economic policy that, in the short term only, favours the wealthy (tax breaks, loopholes during times of record profits as well as tax incentives to MOVE jobs and factories overseas while at the same time reducing education opportunities for the average American).
 
Kembudo-Kai Kempoka said:
I lived in Belgium for a spell. Flat tax at around 55-60% for all income levels. Everybody hates it till they retire, and find their living expenses paid for in full

An interesting bargain...I might make it, given the chace.
 
I, too, think a flat tax, with no loopholes, breaks, or subsidies is probably the most fair system of taxation we can come up with. If we institute it, we can adjust the rate based on what we want the government to spend. And lastly, if we are going to give corporations the rights of the individual, they can be taxed like an individual.
 
Flying Crane said:
What I would do is tax the wealthy and the super-wealthy on a graduated rate, for income over certain amounts. for example:

income of 250,000 to 500,000, tax at 40%.
income of 500,001 to 1million, tax at 50%
income of 1million and 1 to 5 million, tax at 65%
income of 5million and 1 to 10 million, tax at 80%
income of 10million and 1 and over, tax at 90%

My numbers here are just sort of random numbers that I came up with in a hurry, but it captures the essence of my message.

I don't have a problem with wealth in the abstract, but I believe that the super-rich need to be willing to take a step back and recognize that they have enough. Money becomes a game for them. It is monopoly money and is meaningless. Yet many of them just keep on hoarding more and more. This is what I object to. So, I think that when you move into the realm of the super-wealthy, you should pay most of that back in taxes, and take some of the burden off the poor and midle class. When you make an annual income of tens of millions of dollars, paying a rate of 90% or so shouldn't really make much difference in your lifestyle, if you live a REASONABLE lifestyle (I know, REASONABLE is subject to interpretation, but these are my views I am expressing). By contrast, a poor family is affected much more directly and heavily by the taxes they pay, even tho the percentage is much smaller. 20% of a $20,000 annual income is a lot harder to swallow in concrete ramifications, than 80% of income earned between 5 and 10 million.

I work in the financial brokerage industry, so I do have exposure to this kind of thing on a daily basis. My opinion is based on what I see, working in this industry.

So in your model, success should be punished? How much would these rich folks reinvest through your brokerage if the government was taking 40% or more away? How many people who live on commissions in your industry would lose jobs if these people just stopped investing their money, and let it sit in their bank accounts at the minimum rate?

The economic multiplier effect is real. Removing large sums of money in the form of tax as wealth redistribution for government programs, takes money out of an economy and causes market failures in both a macro and micro economic analysis. In the end it hurts the middle class more by stifling job growth and causing pricing and supply problems with the goods and services average people use.

While the overemphasis on tax breaks is also problematic, tax gouging to level the playing field will only chase money away from the economy
 
First of all, our taxes don't go to "the government," they go to us. I kind of like my schools, roads, libraries, police, fire department, ambulances, bridges, and parks. And the rich and corporations take advantage of those things, too, and in most cases, in far greater capacity than the poor do.

Walmart is a particularly excellent example. They pay people low wages (average $14,000 annually), and find every way possible to avoid benefits, generally by keeping people at part-time status. (And a recent memo leaked that Walmart was actually trying to hire employees who were unlikely to need health care!) That way, Walmart's employees are forced to use more tax-supported services, like Medicaid. Walmart has more employees on Medicaid than any other corporation in America. Meanwhile, Walmart's profit was more than $9 billion, and Walmart's CEO raked in nearly $23,000,000 in salary, bonuses, and stocks last year. Now that's what's called "Corporate Welfare."

And don't forget the government (read "tax dollars") subsidies to ExxonMobil, who earned more profits last quarter than any corporation in the history of the world while they gouged us at the gas pump. And the pharmaceutical industry, who, as of yesterday, will be getting billions of tax dollars in drug benefits for seniors, with no provision whatsoever for bulk discounts.

The average check for Aid to Families With Dependent Children ("welfare") was less than $400/month. Frankly, I'd rather my tax dollars go to give a few hundred dollars worth of food to poor children than to some extra stock options to an already lavishly compensated CEO.

What I'm trying to say is this: you can't look only at "welfare" and "medicaid" without also factoring in corporate welfare. The rich get BIG, generally disporportionately big, benefits from our tax dollars, and yes, they should pay big dollars in taxes.

(BTW if you want references, you can go to the Dept of Labor, Dept of HHS, IRS and the AFL-CIO websites, and the front page of your local newspaper)
 
Flying Crane said:
in this example, $4.3 million net, per year, isn't somehow enough? I'm just talking about some basic social responsibility. When do the ultra rich have enough? I would actually like to see them recognize this on their own and decide to stop taking compensation, or at least drastically reduce it. And based on this example, with the graduated tax rate, this is really closer to 80% overall, not 90%.

Why does this nation think that the ultra wealthy need protecting? They aren't setting a place at their table for you, my friend. They won't let you join their ranks.
And so therefore we have the right to take their money! Thats a great philosophy, anyone who has "enough" money by my standards is open game to take from! I can't wait until the next time I see Paris Hilton!

I can't even begin to understand this logic.

7sm
 
Phoenix44 said:
First of all, our taxes don't go to "the government," they go to us. I kind of like my schools, roads, libraries, police, fire department, ambulances, bridges, and parks. And the rich and corporations take advantage of those things, too, and in most cases, in far greater capacity than the poor do.

The taxes don't go to government? Then who the heck is taking them out of my paychecks? Stop! Thief! hehe

seriously, all money taken out of taxes is filtered through government, which is mostly wasted. Do you think its 100% efficient? think every tax dollar you spend (if you do pay taxes) comes back to you? See bottom

Walmart is a particularly excellent example. They pay people low wages (average $14,000 annually), and find every way possible to avoid benefits, generally by keeping people at part-time status. (And a recent memo leaked that Walmart was actually trying to hire employees who were unlikely to need health care!) That way, Walmart's employees are forced to use more tax-supported services, like Medicaid. Walmart has more employees on Medicaid than any other corporation in America. Meanwhile, Walmart's profit was more than $9 billion, and Walmart's CEO raked in nearly $23,000,000 in salary, bonuses, and stocks last year. Now that's what's called "Corporate Welfare."
Walmart in most cases (at least I would think!) does not offer terminal jobs. you don't grow up thinking "boy, I'd love to work at Walmart ALL MY LIFE!" Go out, get an education, and get a better job if you want one! The government subsidized public universities/community colleges. Take advantage of them!

Its not suprising that Walmart has the most employees on Medicaid. They are the biggest employeer? Lets look at the demographics and statistics of who is on Medicaid, then we can talk.

When you head up a multi-billion dollar company, have millions of employees working for you, have people at your neck every day wondering why you have lower profits then they want, get no sleep because you work 18 hours a day, worked for 30 years to get in your position, got your MBA or other high level degree, tell them you want to be paid 18k a year. Class warfare. Plain and simple.

And don't forget the government (read "tax dollars") subsidies to ExxonMobil, who earned more profits last quarter than any corporation in the history of the world while they gouged us at the gas pump. And the pharmaceutical industry, who, as of yesterday, will be getting billions of tax dollars in drug benefits for seniors, with no provision whatsoever for bulk discounts.
Darn those nasty capitalist! How dare they make a profit! nasty! BTW, gas prices went up due to effects outside of the realm of Exxon. From my understandings, their margins percentages staid the same as always, just the cost of fuel went up. Pharmaceuticals have programs now for free drugs for some people, and if we ever do see welfare drugs (hope this never happens), I'm sure the government will use their big stick to force bulk prices.

The average check for Aid to Families With Dependent Children ("welfare") was less than $400/month. Frankly, I'd rather my tax dollars go to give a few hundred dollars worth of food to poor children than to some extra stock options to an already lavishly compensated CEO.
Send a check to the IRS, telling them you want to pay more. They might even let you specify where you want it sent. You can also find some local poor families who need help and donate to them. I know I have in the past.

What I'm trying to say is this: you can't look only at "welfare" and "medicaid" without also factoring in corporate welfare. The rich get BIG, generally disporportionately big, benefits from our tax dollars, and yes, they should pay big dollars in taxes.
they already do pay more. Taxing them -more- will just succeed in redistributing wealth to the government and the poor, which will do great in strangling the economy in the long run.

I, too, think a flat tax, with no loopholes, breaks, or subsidies is probably the most fair system of taxation we can come up with. If we institute it, we can adjust the rate based on what we want the government to spend. And lastly, if we are going to give corporations the rights of the individual, they can be taxed like an individual.

But it sure as heck better not be at that 90% level. Even 50% is ridiculous, unless you want the government to be everything for you, and want DC to decide everything for you... thats one reason I asked what people thought the role of government was. I don't want DC telling me what doctor to go visit, what car to drive and where I should live. These are my decisions and I want them to stay my decisions.

personally, I'd be all in favor of consumption taxes. I think that would be the fairest system. Makes too much sense to pass in washington though. It fortunately does have some advocates.

btw, who adjusts the rate of taxation? sounds great, but the same lunk heads up in DC who are spending our taxes are also the same ones setting the rates. It will never go down. Why? Lets look at an example from the Department of Education. They get 100 dollars to spend (just a for instance). The end of the year comes around, they have spend 75. What happens to the other 25? think it comes back to those taxed? sure not! they get desperate, realizing that if they don't spend it, the government might take it back next year! so they go out and spend that extra 25, and report they need -at least- that much next year. So, moral of the story. They should get in this case 75 a year for two years, but in fact they get 100 each year, maybe more. Make sense? My wifes in education, I'm a student, and I know alot of people in the education system and state government... this happens frequently. This is the inefficiency I pine against. The more money that circulates through DC and other governments, the worse off we are.

I'd be scared to death for 50% of our taxes to be in DC. There is a reason we are the worlds economic super-power and Denmark is not (granted, not the only reason, but one of them).

MrH
 
7starmantis said:
And so therefore we have the right to take their money! Thats a great philosophy, anyone who has "enough" money by my standards is open game to take from! I can't wait until the next time I see Paris Hilton!

I can't even begin to understand this logic.

class warfare my friend, class warfare. However, it is baffling that people do believe it.

You know, the way you state it can be termed another way... its called theft! You take stuff away from someone (the victim ie the horrible rich) and give it to someone else. If I were to do it personally, its called theft and I go to jail. If the government were to do it, its called taxation, and we all smile and think its the most wonderful thing. Its strange...

MrH
 
Flying Crane said:
What I would do is tax the wealthy and the super-wealthy on a graduated rate, for income over certain amounts. for example:

income of 250,000 to 500,000, tax at 40%.
income of 500,001 to 1million, tax at 50%
income of 1million and 1 to 5 million, tax at 65%
income of 5million and 1 to 10 million, tax at 80%
income of 10million and 1 and over, tax at 90%


I don't have a problem with wealth in the abstract, but I believe that the super-rich need to be willing to take a step back and recognize that they have enough.

Yet many of them just keep on hoarding more and more. This is what I object to. So, I think that when you move into the realm of the super-wealthy, you should pay most of that back in taxes, and take some of the burden off the poor and midle class.

I'm no economist...but I really don't think that this heavy a taxation will work and in the long-run it would totally sap people's drive to be "successful" if we pay for those who don't achieve by the sweat of those who do.
Seems too much like socialism or communism... just too close.
Not wanting to be "argumentative"...but this is how I see it.

Your Brother
John
 
Flat-tax, no loopholes, no exceptions... simple, doable, fair and much more effective than our current, messed up, system.

just my thoughts...



Your Brother
John
 
Brother John said:
Flat-tax, no loopholes, no exceptions... simple, doable, fair and much more effective than our current, messed up, system.

just my thoughts...



Your Brother
John

scaled?

I'll vote for consumption tax. whoever spends more pays more. much simpler.

but I'll agree, our current system is so screwy LOL

MrH
 
Well, ok. I threw out there a suggestion that not many people seem to be happy with. Let me clarify: I pulled these numbers out of my butt. I threw this together on the spur of the moment, so I am not suggesting this is the real answer. I am suggesting that there needs to be some kind of redistribution of wealth in this nation, and perhaps a different approach to taxation is part of the answer. This suggestion was really intended to spark some thought about the bigger picture.

Let me give you a scenario: "Dan" is one of the top two executives in a large, wealthy corporation. This corporation has about 20,000 employees, and has a presence in all 50 states of the US, plus an international presence.

Dan is compensated to the tune of several million dollars a year. He has been a very successful business man for many years, and holds personal assets worth tens of millions of dollars, including vacation homes around the nation (maybe even around the world, but I don't know). Arguably, Dan would never need to work again in his life, if he chose not to. He has more money than he can spend, even if he never collects any interest on it (in my opinion).

Dan screws up. He is a lousy executive, and the company is not thriving the way the Board thinks it should be. And Dan, a married man, is also having an affair with a junior level VP in the company. Given this situation, the Board decides to fire Dan. So what kind of severance package does someone like Dan deserve, in the eyes of the Board? Keep in mind, he is a failure at being the executive he was hired to be, and he has caused a scandal by having an affair within the company. Well, the answer, according the the Board, is that Dan deserves $10 million dollars for being fired. This is a true story.

If I was fired from my job for performance issues and having an affair with a co-worker, I would be escorted to the exit by Security personnel, and I would get my last paycheck for work already done. Nothing more. Zilch.

This is an example of the runaway finances that big corporations and wealthy executives get to play with. I find this kind of financial behavior objectionable. How people can make these kinds of financial decisions is what I just do not understand.

Here is another thought: Let's take the above described company and recognize that it is successful and wealthy. The top level of executives are compensated with several millions, maybe even tens of millions in some cases, of dollars each year. The company has 20,000 employees. The employees, while not being poorly paid, are certainly not well paid. They are paid just well enough to think that it would be difficult to find another similar job that pays enough more to make it worth making the jump.

OK, so according to the market, they are reasonably well paid. But I suggest that the company could do better than that for the employees. If the top brass are paid many millions of dollars, then I suggest the employees are not paid well enough. Some of this profit should be redistributed at least to the employees, since without them, there would be no profit for the top brass to get. When the top brass is compensated some 200 times more than the line employees, I think something is out of balance.

Let me restate: I don't have a problem with people becoming wealthy, but I think our notion of what is acceptable in wealth has become distorted. I think it is unfair, socially irresponsible and morally reprehensible.

Some people argue that this money gets cycled back into the economy, so the wealthy should just be allowed to keep it. I say that it would be cycled back into the economy much more if it was distributed to the workers thru better wages, rather than sitting in the hands of the few wealthy. This would also spark greater company loyalty among the employees, and make the company stronger in the long run.

Even if a company pays its employees a wage that is in line with the industry, I believe this is not enough. If the company is successful and wealthy, then the employees should be paid better than the industry average. After all, without the employees, the company would not have the success.

My numbers may be a bit off, but I believe some 80% of the nation's wealth lies in the hands of some 10% of the people. I think this is unacceptable.

Meantime, since my bid for the Presidency has not yet been successful, you all can breathe easier about by proposed tax initiative...
 
Not sure how the Dan example fits into a redistribution of wealth for the common good theory. If a company (through its board of directors) agrees to pay someone severance, in free societies, that is called a business decision. The only need to answer to their shareholders. Customers who dislike these decisions can choose to take there business elsewhere which will provide real feedback to those decisions.

Truth is, guys like Dan with many vacation homes pump lots of money into the economies of the various states in which they own homes. They employ lawcare persons and decorators and caterers and all sorts of other people benefit from their spending. Wealth when pumped into an economy creates jobs and generates revenues through the multipler effect. Overtaxation impedes this process.
 
mrhnau, I hope you are really young, because if you're not, your arguments and your suggestions ("Send a check to the IRS") bespeak a naivete of the direction things have been taking in this country in the past few years.

The middle class is losing jobs. People in good paying jobs are being laid off, and they have no place to go but low paying Walmart-type of jobs, because that's the main type of job being created in this country. Many jobs are being outsourced. I personally have a doctoral degree and more than 20 years of experience in my field, and when I lost my job a few years ago, specifically because of the economy, all I could get was two PART time jobs, which neither made up the money nor the benefits of one FULL time job. In fact, it's hard to get a decent FULL time job, because no one wants to give benefits or a pension plan. The "community college" recommendation you made is worthless to the already well educated individual who's lost a job--and there are many.

And I'm lucky. I grew up with a family that cared about me. And I hope you are also blessed to be intelligent, able-bodied, and have caring parents. But what if you're not? What if your parents died in a car accident, and you didn't have the luxury of a good education? Or brain damaged? Walmart MAY be your terminal job, and you still have to support yourself and your family. And I believe if you work hard--even if you work hard for Walmart--you should be able to support yourself and your family.

Many people in this country now have the "every man for himself" mentality. But there are lots of us who have a different vision for America, where we do better because everyone does better.
 
Flying Crane said:
Well, ok. I threw out there a suggestion that not many people seem to be happy with. Let me clarify: I pulled these numbers out of my butt....
Wow....
then THAT explains why the stunk....




hahahaha....
sorry, just couldn't help myself, ya made it toooooo easy.
;)
It's good to see WHY you think the way you do, even if we don't agree.
Have a good one.


Your Brother
John
 

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