I guess I must be a communist for quoting an ancient Greek author as a way of raising concerns about growing income disparity in the United States.
OK, I confess. I am concerned with how President Obama and Democrats caved to Republican rejection of tax increases, particularly for the nation's wealthiest citizens. Yes, I do wonder if Plutarch had a point that an "imbalance" between poor and rich could be dangerous to our republic, especially when our very rich citizens are doing so very well right now.
Well, here's another commie--and probably unpatriotic and un-American--view of this issue. It's from Robert Reich, former U.S. labor secretary, the chancellor's Professor of Public Policy at UC-Berkeley, and the author of Aftershock. He published this blog, "Ransom Paid" on, ugh, the Huffington Post.
Anyone who characterizes the deal between the president, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics.
The deal does not raise taxes on America's wealthy and most fortunate -- who are now taking home a larger share of total income and wealth, and whose tax rates are already lower than they have been in eighty years. Yet it puts the nation's most important safety nets and public investments on the chopping block.
It also hobbles the capacity of the government to respond to the jobs and growth crisis. Added to the cuts already underway by state and local governments, the deal's spending cuts increase the odds of a double-dip recession.
9 comments:
Soccer Mom,
It is outrageous for some people to expect that those benefiting most from an economy should pay their fair share to shore it up. How dare you?
DH
Daffodil Hugger,
What about the 51% of people who pay nothing? Yes zero, ziltch, nada?
Why should I support their desire to simply be leeches on society?
Having them pay nothing, while redistributing the wealth from the other 49% is indeed the definition of communism.
The First "Anonymous" wrote:
"What about the 51% of people who pay nothing? Yes zero, ziltch, nada?"
I recognized that reference, and decided I needed to refresh my memory of it. Some links...
http://rightcoastconservative.blogspot.com/2011/05/51-of-households-pay-no-income-tax.html
http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0
http://taxes.about.com/od/income/qt/Social_Security.htm
http://thinkprogress.org/economy/2011/04/20/173905/house-gop-tax-lie/
http://motherjones.com/kevin-drum/2011/07/51-zombie-lie
I tried to grab an ideological spread, because it seems to be a matter of sometimes there are lies, damned lies, then statistics.
It seems like half the households pay no FEDERAL INCOME TAX, but that is quite different from paying "sero, ziltch, nada" in taxes. Just off the top, they pay excise, state, payroll and sales taxes. And what pays for our fabulously decrepit & crumbling infrastructure? Well, if you ask any independent trucker who pays for the highways, he will likely say he and his fellow truckers do, because they pay more for tolls and for diesel, amongst other charges levied upon them.Their rigs also weigh more, causing more wear upon the roadway. But considering how much they pay, they commonly have the feeling that the rest of society is enjoying the benefit of the roadway at their expense. However, even the lowliest driver, buying fuel of whatever grade, pays into the highway fund, same as the trucker. Perhaps the truckers have a case against mass transit riders. But even they pay a fare to ride, part of which goes toward paying fuel cost.
Looking at the figures, a healthy chunk of that 51%, 20-to-30%, are Social Security recipients who are not making much from investment returns, if they have any. From this link...
http://taxes.about.com/od/income/qt/Social_Security.htm
...one finds the table showing this, about a quarter of the way down. In other words, they don't make enough to tax, according to the Fed.
Speaking of not making enough, a large percentage of the households don't earn enough. They're wages are flat or declining, have been so for a decade or more, or they are unemployed. Taxing them would be squeezing blood from a turnip, and would harm the economy further, much more so then even taxing the upper brackets. After all, when they have money, they spend it, moving the economy. They are the Demand component in Supply & Demand, and the upper income brackets are not large enough to substitute for them re: Demand. And the Federal Income Tax break these "Lucky Duckies" get is an effort to make up for the low wages they earn. One way to change that would be to raise wages. Then they would finally earn enough to pay some taxes. But that would be money out-of-pocket of a real "Job Creator" instead of folks who just do well at moving money around or have been winners in the Lucky Sperm Club. That why they had higher taxes in bygone times on inheritance and capital gains, in order to incentivize Capitol to start & expand businesses that employ citizens, who in their turn create demand for the businesses and pay taxes in their turn, creating a Virtuous Circle. Right now, the tax code makes it more profitable to invest in markets and funds and less so to start and run a business, unless that business was investing in markets and funds.
And that takes us to what some people are so pissed off about. For 10 years we've done the "tax-cuts-for-the-Rich" thing, and The Rich, those folks at the top 2% of the wealth scale, have Done Good. Thanks, Dubya! But the economy is down, which means revenues are down, a lot. Revenues as a percentage of GDP is *way* down, last I saw it was 15% of GDP, as opposed to a historical average between 19-to-21%. Wages are flat or declining for the lower-to-middle classes, so we're not going to see much revenue from that end, despite what Sen. Hatch would desire. And the tax rates are at a 50 year low. So, now what? Well, the modest proposal from that pack of commies, the Democrats, has been to raise taxes on the segment of the population who have seen their incomes expand like a rubber balloon since Dubya handed them a tax break, from 36% to 38%-39% percent. They want to raise taxes 2-to-3% on the segment of the population that have seen their incomes rise on average. See this link;
http://projects.nytimes.com/executive_compensation
...for a rundown on how the C.E.O. class is doing this year. Now, 2-3% on income like that won't make them happy. But returning the rates to what they were under Clinton isn't communism. Really. It's not. Even under the most liberal Nordic Socialist Regime, you own property and capitol assets. Now, coming to your house, your property, seizing it and sending you and your family to a collective farm for re-education is Communism, with a Capital C. See the difference? You might try to make the case that raising a C.E.O.'s taxes is a form of Creeping Socialism, but not Communism. That would be like me calling you a Facist. And it would render invalid this entire exercise, wouldn't it? Because I'm sure you don't dress up in a black uniform and beat the crap out of your enemies. Besides, you're keeping my investments from being taxed, so just in case no one else has offered you a bone, Thanks!
However, history shows unemployment and rising income inequality can have severe consequences on those of us with assets. Usually, The Mob doesn't differentiate between the real robber barons (and usually when the fecal matter hits the fan, they've already blown the country for more hospitable climes, taking their liquid assets with them) and those of us who have worked long & hard and invested wisely, and have a bit more than The Mob. Usually we're the ones who get the brunt of The Mob's wrath, while the ones who actually created the mess get to go somewhere else to complain about the tax rate there.
So, perhaps you & your Tea Buddies could lighten up a little? Wrecking the economy and bringing on Thunderdome doesn't end well for you, and the rest of us. Turning the Dollar into a currency as precious as the Peso is not desirable. Just ask Mexico. Quit listening to Stanley Druckenmiller, he's likely on the short side of the bet. Work on modifying the tax codes and tax rates, but if you stand for NO NEW TAXES like it's an non-negotiable dogma of Faith, while the elderly and handicapped lose benefits, and millionaires show off more and more bling & excess, you're setting it up so we all lose in the end.
And apologies for multiple posting. I felt moved by the subject to say more than the character limit of 4035 or whatever it is.
Thanks everyone for commenting and debating this issue. And Daffodil Hugger, thanks for checking in again.
Second Anonymous,
Please move back to mother Russia or commie China, where ever it is you hail from.
You don't deserve to call yourself an American.
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