The Income Problem

Quote of the day -- On Wealth Inequality

Tax time in America: it's the rich vs. poor (guest post)

It's them vs. us, folks:

"It's tax time, if you hadn't noticed, and regressives are once again fulminating about how Americans in the bottom half of the income ladder pay little or no income taxes while the top 1 percent accounts for over 25 percent of total income tax revenues. They're also talking about "tax reform" as a means of rectifying this.

Watch your wallets.

The truth is:

(1) The top 1 percent takes in over 20 percent of total income, so in a progressive tax system we'd expect them to pay at least 25 percent of total income tax revenues, if not far more. (

2) The bottom half pays far more in Social Security taxes, which are regressive (income above $113,700 is exempt), and which account for almost as large a share of federal revenues as federal income taxes.

(3) Sales taxes and user fees have soared in recent years, taking a far larger share of the paychecks of the middle class and the poor than they do of the very rich.

(4) A significant portion of the earnings of the wealthy aren't subjected to income taxes at all, but to capital gains taxes, which are substantially lower (which is why Mitt Romney pays some 13 percent of his $20 million a year earnings in taxes), and

(5) Tax-free benefits such as employer-provided health care and pensions have skyrocketed for those at the top, but low-income Americans receive little or none of these tax-free benefits. Add it all up and it turns out our tax system is regressive overall, taking a larger portion of the pay of lower-income Americans than of those with high incomes. The rich should be paying far more."

--Robert Reich, American political economist, professor, author, and political commentator

Links:

Robert Reich

Robert Reich - Wikipedia

 

Robert Reich | Facebook

Things Americans don't do

Things we Americans don't do but Australians, wisely, do.

From economist Robert Reich's Facebook page last evening:

"Besides the other positive attributes I listed several days ago when I came to Australia, I should add several others -- 

a requirement that everyone votes, one of the best and most responsible safety nets for Australians who fall into poverty, including 

an efficient system of universal health care and 

public pensions, 

an excellent civil service, 

a carbon tax, 

a financial sector that hasn't become a casino, 

and a business community committed to improving living standards of Australians."

While it's true that Australia doesn't spend nearly as large a portion of its GDP on the military as we do, that's true of every other nation in the world. What makes Australia stand out is a strong sense of civil society, evident in almost all its institutions. (For example, Aussies don't like the current Labor government mainly, it seems, because Prime Minister Julia Gillard was put in place via a back-room deal that replaced Kevin Rudd, the Labor Leader they thought they were voting for in the last election.) The challenge here in future years is to move from a commodities-based export economy to a high-tech one -- but it's a challenge the nation seems fully aware of, and, given the strength of its civil and economic institutions, seems fully capable of pulling off."

The thing is, we Americans don't work together any longer. Congress doesn't. The political parties don't. We're broken and a lot of it, at least in government, is because the wealthy and corporations have bought our representatives. They legislate for them--for those wealthy and corporations--first and us second, if even then.

We have to go back and work together again. We have to be Americans, first and last. We have to work together to fix our problems. We have to compromise.

It's really not a dirty word.

Links:  Robert Reich

Robert Reich | Facebook

Robert Reich - Wikipedia

Paul Krugman: so right on 9/11

Writing this week on--what else?--the 9/11 anniversary, Nobel Prize-winning economist, writer, columnist and teacher Paul Krugman wrote the following in The New York Times: "What happened after 9/11 — and I think even people on the right know this, whether they admit it or not — was deeply shameful," he wrote. "The atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neocons wanted to fight, for all the wrong reasons." As I said, he couldn't be more right on this. Trouble is, people are attacking him for it and the column. When you combine the fact that, as I've written here before, that George W. Bush was warned about just such an attack more than a month earlier in a Presidential Daily Brief and he totally, utterly and completely shirked his duties and responsibilities by ignoring it, on top of his making political hay on this and using it to unilaterally and unprovokedly attack Iraq, which had nothing to do with this at all, it merely further proves Mr. Krugman to be absolutely correct in his brief statement. Links: http://krugman.blogs.nytimes.com/2011/09/11/the-years-of-shame/; http://www.slate.com/blogs/weigel/2011/09/12/get_krugman_.html?wpisrc=twitter_socialflow

Quote of the day--on Wisconsin and our oligarchy

What Mr. Walker (Governor of Wisconsin) and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions. 

You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions.

And now Mr. Walker and his backers are trying to get rid of public-sector unions, too.

There’s a bitter irony here. The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence.

So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t.

--Paul Krugman, Nobel Prize-winning economist, author and columnist for The New York Times

Link to original post:  http://www.nytimes.com/2011/02/21/opinion/21krugman.html?_r=2&partner=rssnyt&emc=rss

It can't be stressed enough, folks----vote tomorrow

“Just to be clear, progressives would be foolish to sit out this election: Mr. Obama may not be the politician of their dreams, but his enemies are definitely the stuff of their nightmares.” –Paul Krugman, economist, New York Times columnist

Quote of the day---and you're still voting Republican?

Notes From a Class Worrier Robert Reich, Nobel Prize-winning economist The decline of America's middle class can be charted directly. In the three decades after World War II, the median wage (smack in the middle) grew rapidly, right along with productivity gains. Even as late as 1980, the richest 1 percent of Americans received only about 9 percent of the nation's total income. But starting in the 1980s -- and increasingly since then -- the economy has made the rich far richer without doing squat for the vast middle. The median hourly wage has barely grown, if you take inflation into account. Indeed, it dropped in the last so-called "recovery" between 2001 and 2007. And health-care and pension benefits have declined; we've gone from defined-benefit pensions to do-it-yourself pensions, while health insurance premiums, deductibles, and co-payments have skyrocketed. Meanwhile, the rich have been getting a larger and larger portion of total income. From 9 percent in 1980, the top 1 percent's take has increased to 23.5 percent in 2007. CEOs who in the 1970s took home 40 percent of the compensation of average workers now rake in 350 times. Financiers who forty years ago made only modest fortunes today, even after the Great Recession they helped bring on, routinely earn seven and eight-figures. In 2009, when most of the nation's middle class was deep in recession, the 25 best-paid hedge-fund managers took in an average of $1 billion each. (Their marginal income tax, by the way, was barely over 17 percent, while the typical family paid a marginal tax far higher.) What happened? It wasn't just greed. It was also the systematic and ever cleverer manipulation of laws and rules by those able to pay lobbyists, legislators, lawyers, accountants to do their bidding. As income and wealth have risen to the top, so has the power to manipulate the system in order to acquire even more money and more influence. ...Our choice in the years ahead is either demagoguery that turns Americans further against one another and the rest of the world, or genuine reform that enlarges shared prosperity. It is the responsibility of all of us to fight the former and work toward the latter. Back to me: As if you didn't know it, our legislators are being bought and sold. But we're letting it happen. We let it happen by not pushing for campaign finance reform and not limiting our political campaigns as Britain does and, finally, by not putting the "Fairness Doctrine" back into our political discussions. In the meantime, NASCAR and NFL comes on soon. Pass me a beer. (Right?) Link to original post: http://www.huffingtonpost.com/robert-reich/notes-from-a-class-worrie_b_676140.html

Quote of the day--election eve

"Just to be clear, progressives would be foolish to sit out this" (November) "election: Obama may not be the politician of their dreams, but his enemies are the stuff of their nightmares." --Paul Krugman, The New York Times

Elections, 2012

Republicans aren’t trying to rescue George W. Bush’s reputation for sentimental reasons; they’re trying to clear the way for a return to Bush policies. And this carries a message for anyone hoping that the next time Republicans are in power, they’ll behave differently. If you believe that they’ve learned something — say, about fiscal prudence or the importance of effective regulation — you’re kidding yourself. You might as well face it: they’re addicted to Bush. --Paul Krugman, Nobel Prize-winning Economist, Columnist, from his article in The New York Times, "Addicted to Bush" Link to original article here (and it's a good and important read): http://www.nytimes.com/2010/07/23/opinion/23krugman.html?hp