No one is calling for a redistribution of wealth here, so settle down- this report came out today and has very striking numbers- very different than what the average American perceives. Discuss. Source
The second set of charts of change since 1979 made my jaw drop. While our overall wealth in the world is very dominant, our distribution of wealth, as the charts show, is getting closer to Latin American standards. I would imagine there are dozens of issues Americans have a high misconception about- this being one of them clearly.
The numbers don't mean a thing. What's the story behind the numbers? Why is the distribution getting so skewed? Is it the left's contention (I know the OP qualified their motivation) that because these numbers are so skewed we must tax those in the top 10% and "share the wealth" regardless of how it is created or maintained? Is it the policies of the left that have created a perpetual underachieving lower class? Do the policies of the right disrupt the fairness of capitalism and keep the middle and lower classes from advancing their income? I don't fault the rich (I'm not rich in the US) for obtaining their wealth. I fault the rich if they obtain it through economic and political manipulation of our system. This can include the hedge fund manager making millions or the deputy chief of police in San Jose, CA making hundreds of thousands, or the contractor who has greased the palms of his state or national legislator to get an easy, profitable contract without real value to our country. I think most Americans would settle for a "fair" system of opportunity and not a system that makes it "fair" because they want to sit on the couch or work a 40 hour week with no financial risk and make as much as the business owner busting his *** and risking their livelihood. Maybe I'm wrong.
Personally- what this graph tells me, is similarly to NewDoc, if and when there are loop holes or cheaters- I want to punish them more often and further. It doesn't make me want to change the tax structure in favor of poor people (other than to simplify it for everyone) or tax rich people further (although in light of our debt, I do think the repeal of the Bush tax cut for the upper 1% is one of a half dozen possible solutions)- it does make me want to enforce existing tax laws better. Why not set up an incentive system to catch thieves or tax fraud? Give people say, 5% of what they can recoup for the govt. if they catch someone in the act and produce revenues? Give people rewards for finding folks like the crooked city council members in Bell, CA. Reinforcing the system and culture of "fairness" as much as we can is important to maintaining a higher quality of life, and incentive, for everyone. Nice contribution to the discussion Ag. Compound interest is a cutesy anecdote, but doesn't explain the issue. Skip the attacks.
NEWDOC - It's not about "faulting" the rich. I don't "fault" the rich either, but I also don't think it's sustainable to have a setup where wealth is increasingly concentrated among a small group of people. That doesn't seem smart, or sane, or sustainable to me. Do I want to tax the rich more? Absolutely. I think it's smart policy for a number of reasons - 1. we are in a tremendous amount of debt 2. the rich have more of the money, so of course we should look there if we need money (in addition to cutting spending, a LOT) and 3. lower top rates have exacerbated the problem of the top 1% paying a larger percentage of the total pie (which is counter-intuitive to people until they really look at the numbers). But do I want to "punish" the rich? No, not at all. But we need to divorce ourselves from the mentality that taxes = punishment. Taxes are how we pay our national bills. When we think of paying the national bills as "punishment", the debate is poisoned from the start. I don't think of my mortgage payment as punishment, or any other bills as punishment. They are just the bills and they've gotta be paid.
I don't want to punish the rich. But I would like to see an end to the war on the poor we are now engaged in.
More to the point, I would like to see middle and working poor classes take responsibilty for knowing more about political and economic conditions that keep them marginalized and thinking they have a responsibility to always defer to the rich. It is more than clear that ignorance is the new slavery
problem is the BHO and his ilk think top 1% to 10% is "rich". $164K to $250K ish all the liberals especially in the top .01 need to pay more and all on here who feel the need can always pay more...the treasury is open and will accept your "investments"
or cut the amount of hand outs they get....looks like 90% is sucking off the system or novel concepts like cut spending
More to the point, I would like to see middle and working poor classes take responsibilty for knowing more about political and economic conditions that keep them marginalized and thinking they have a responsibility to always defer to the rich. __________________________________________________ i worked my way up from nothing. im not rich but obama would probably classify me as such. why should i be burdened more than the little guy? why shouldnt i be able to make enough to leave a substantial sum to my children? why does the left always argue the class warfare bs to the low income people in this country? what is in it for the union leadership if the workers of the world unite? it is power and money is it not or do you believe that they only have the best interests of the people at heart?
as usual, this has devolved into poo-throwing. AwK - As Yo said, it's both. Spending must be cut and we need a revenue system that works. Why do you ignore the effects of cutting the top brackets? Every time I bring the effects up, people run and hide and bring up other issues. Why? Do you think an increasing concentration of wealth is a problem? Is it sustainable? What are the effects on the economy as a whole?
Again - if you think of taxes as punishment, the debate is poisoned. Paying our bills is not, has never been, and should never be considered punishment. Raising income taxes on top earners by 3% is not punishment, it's an attempt to collect revenue to pay the bills that we have. These bills didn't just show up in January 2009, they've been here for decades. If you guys want "the left" to come to the table on spending cuts you really have to drop the "punishment" angle and consider tax increases. Both need to happen, now.
The problem with tax cuts, just like entitlements, is once you give them out, people expect them to always be there. And tax cuts, like entitlements, cost the govt. revenue. The goal is to tax enough- not too little or too much. You could make the argument that this country has experienced strong periods of growth, had budgets more balanced- and at tax rates for the upper 1% that were higher. As Johnny and Yo are saying, if you want to balance a budget, you need to bring in revenue just as much as you need to manage expenses. It's a 50/50 balance- not a one sided one focused on spending alone.
Reagrding the graphs, I have a few comments: 1) When I saw yahoo news I thought maybe it was credible. When I saw the graphs were from Mother Jones and there was no methodology provided I assume they are worthless. 2) Some of you are arguing very different things here. The first 3 graphs are talking about income only which is very different from wealth. In fact, there is not a single graph or any data provided on the divide in wealth between classes. 3) Income disparity is a joke when shown like this. There are so many part time workers and minimum wage workers that do other things like school etc that skew the numbers badly. It should be no surprise that some people make more money than others. Especiall;y now, when part time work and work from home and other ventures are included in the numbers. 4) A gap in income is only worrisome if there is no mobility between classes. In America (as opp[osed to Latin America) a family can ramp up the income levels fairly rapidly- less than a generation. That is the promise of America and it still holds. I dont think there is any doubt that we, as a country, are headed towards a sales or gas tax. I'd suggest a moderate tax rate increase on incomes over $500K and a 2% sales tax with no exceptions. Everyone gets skin in the game. Change the tax code on US based multinstionals and tweak SS you would have damn near a trillion dollars a year in revenue.
There are several reasons for the increasing gap between the wealthiest segment of the population and the majority. One explanation is the transition of the economy over the past two or three decades from an economy that produces and exports goods into a service economy. An abundant supply of global labor has given large companies the ability to place downward pressure on wages. If labor (or unions) do not submit, companies simply pack up and move overseas. The bottom line of the stockholders and executives increase, but the earning power of the typical American worker decreases. In order to compensate for the lack of earning power, credit and a temporary wealth effect via the housing boom papered over the loss of income. Thirty years ago, the wealthiest Americans weren't necessarily investment bankers. Times have changed. The financial sector now makes up something like 40% of GDP I think. With the destruction of Glass-Steagall, and the innovation of financial products including the securitization of mortgages, the finance industry exploded over the late 90's and early 2000's. One way banks made money was by lending, as millions of homes were built and sold. After the housing debacle, banks could no longer make the same boatload of money lending to the private sector. Then how are they continuing to make large profits? Since the implosion, the federal reserve began loaning large amounts of money to banks at 0.25%. Since the opportunities are no longer for available for the banks to take this money and then loan out to private citizens, they instead use some of it to buy treasuries (which finances the national debt) and earn interest above the 0.25% they borrowed. The rest of the money is used to speculate in the stock and commodity markets. As the speculation drives up prices (food, wheat, oil, etc.) the general population pays more for these essential items. In essence, partly due to fed policy, a wealth transfer is taking place as the higher prices drain money from the general public which then ends up in the hands of Wall Street speculators who have driven up the price. (This also impacts the rest of the world as we are seeing in Africa now). In addition, treasury purchases by the federal reserve known as quantitative easing, frees up billions of dollars for speculation by investors that would otherwise be spent purchasing the treasuries that are now gobbled up by the fed. Finally, the tax code. While it's true that the poor generally pay zero income tax and in fact actually receive net refunds via EIC and the additional child tax credit, it's also true that the working poor pay a 15.3% payroll tax. Only half of this amount is reflected on the check stub as the employer pays the rest, however since the tax is based on the employees output, the entire amount is really being paid by the worker. The wealthiest workers, once having passed a threshold a little over $100,000, do not pay additional payroll tax. The superwealthy generally receive most of most of their income by way of capital gains, generally taxed at only 15% (.3% more than the payroll tax paid by the very poor). In summary, I've listed 3 reasons why we see a growing wealth disparity in America. 1) the out shoring of jobs changing the economy from one based on the production of goods to one based on providing services. 2) political policy that favors the finance sector which has replaced lending with casino like speculation as the means of producing income which at least partially flows from consumers to speculators. 3) A tax code that punishes the producers (especially those in the middle strata) and disproportionately rewards income based on investment and speculation over labor. As wealth becomes more concentrated into fewer hands, those wealth holders become more powerful in shaping policy. Corporations now have the ability to donate unlimited amounts of funds to political causes as the Supreme Court ruled restricting such donations to be a violation of free speech. Powerful corporations and banks are represented disproportionately in governmental regulatory agencies such as the FDA, SEC, and even the Treasury. As a result, legislation passes which favors the powerful corporate interests and squeezes the small business person which ends up consolidating power even more. Wash and repeat.
