The wealthiest one-tenth of 1 percent (0.1%) receives an astonishing percentage of national income and assets in the United States.
Statistically, the top one percent are becoming wealthier even as the working and middle class become poorer. The tea party means well but, unfortunately for America, are bent on hurting Americans to "fix" the problem rather than simply fixing the problem.
As John Hamilton, retired U.S. Foreign Service officer, points out:
"The distribution of our national income has become severely skewed. It is worse than in every single country of the Middle East and approaches Latin America's discord-sowing levels. On the Gini Index, where higher numbers represent higher inequality, the U.S. comes in at 45. For comparison, the numbers in Latin America range from 41 in Venezuela to 59 in Haiti. With a score of 23, Sweden leads all nations in having the most equal distribution of income.
The growing income inequality has been fueled by years of free trade policies, corporate offshoring of jobs, tax cuts for the rich and deregulation of the financial industry.
Such inequality throttles economic development. In the United States, the economic activity of a robust middle class has been an important driver of growth. Until recently, that is. In 1970, when our Gini coefficient was 39.4, the wealthiest 1 percent of Americans took in 9.7 percent of national income. That was a lot, but today the equivalent figure is 23.7 percent. The wealthiest one-tenth of 1 percent receives an astonishing 12.3 percent of national income.
According to former Secretary of Labor Robert Reich, middle-class economic activity is no longer generating new growth and jobs. As the purchasing power of the middle classes declined after 1970, families coped for a time. Women earned a second income; all workers put in longer hours and families drew on the equity in their homes. As those strategies are now exhausted, job growth is anemic. And because the wealthy can spend only a fraction of their income, they are not generating new growth either."
Hedge fund managers, for example, have their fee-derived income taxed at 15%. As Warren Buffet famously noted, he pays a lower rate of income tax than his salaried secretary. In the 1950's hedge funds had not caught on and the rich paid much higher capital gain taxes. The top marginal income tax rates for the super rich were over 90 percent. With John Kennedy's tax cut, the top rate dropped to 70 percent. Corporate taxes were almost 50 percent. This fueled a massive growth for the middle class whose taxes were very low and resulted in very low unemployment.
Today the super rich pay a small hedge fund tax and greatly reduced income tax. If the latest GOP tea party tax cut legislation for the rich goes through the Senate and is signed into law, the super rich income tax rate will drop to a mere 25 percent.
Meanwhile, what's left of the the middle and working classes make up the difference in federal and income tax rates while the poor join them in ever-increasing consumption taxes, sales taxes, fines, and fees. The middle class in particular is sinking into the mire and out of sight!
So what happens when the country decides not to materially tax the top one percent or public corporations any more, despite their accounting for an ever increasing percentage of national income which often doesn't get spent? The simple answer is: they go after the rest of us.
Government is currently seeking consumption taxes, fees, and fines at record levels. They are after taxes on Internet purchases, the gas pump, and almost any and every imaginable way they can come up with to get more money from you and I (even as they are seeking ways to slash medical care to the poor and soon-to-be elderly though government public employee unions who live off of tax dollars are mostly protected).
This hurts the poor, blue, and middle classes, but not the super-wealthy or the corporations. Contrast the GOP proposed 25 percent tax rate for the super rich with the super rich tax rate of about 90 percent in the 1950's which fueled a huge middle class that hired American workers after the Great Depression.
Knowing this, we have to wonder why middle-class Americans line up and pull the lever at voting time to ensure the rich get richer and everyone else gets poorer. Is it a passionate ignorance rooted in a disconnect and escapism?
The GOP Ryan plan will strip away Medicare and Social Security benefits for everyone under 55 (despite them paying into the fund their entire working lives), eliminate much student aid, make healthcare more inaccessible, encourage states to raise taxes through increasing state taxes, sales taxes, consumption taxes, fees, and fines yet will slash taxes on the rich to record lows while ignoring the issues of trade reform, corporate offshoring of jobs, deregulation of the financial industry, etc... all of which benefits the top 1 percent but hurts the American worker and small businesses.
But here's the real problem with the GOP tea party best thinking:
The rich are the primary investors in the large public corporations which have been moving into middle class spaces and offshoring, outsourcing, and insourcing middle and working class American labor to other countries citizens rather than Americans now for a couple decades. This has created a hollowed out middle class, a poorer working class, more poor, and high unemployment (i.e. the unemployment rate doesn't account for the number of actual unemployed Americans).
The public corporate takeover of the middle and working class space has been likened to locust swarms of old that flew in, consumed everything in their path, and left nothing behind them but big retail centers to dump their foreign made consumption junk (which is now rising in price since demand for it overseas has increased) on what's left of America.
This is not an anti-corporation article. The small private corporations of the middle-class, employee owned corporations, and yes large public corporations have a healthy role to play in our economy. But what's been allowed to occur is unbalancing the nation and any real solution must account for it.
All of this has put tremendous pressure on the middle and working American classes and they spawned the tea party in an attempt to address it. Unfortunately, they really don't understand what we've shared and so they voted for corporate sponsored and paid for GOP legislatures to do something about it. What do you think those legislatures are doing?
They are taking steps to ACCELERATE the problem by giving big tax cuts to the rich and ensuring corporations can continue to operate without paying federal taxes so the large public corporate takeover of the middle class space continues faster hurting both Americans and the national interest.
The choice here:
1. You can reduce taxes on the rich and large public corporations more and further accelerate the decline of the middle and working classes hurting them and the poor and driving us right into a new American caste system.
2. You can raise taxes on the rich; close the ability of U.S. businesses to structure as flow-throughs or relocate outside the country to avoid paying taxes and reform their loopholes; implement adjustable value added taxes on all products and services sold in the U.S. that use foreign labor for both American and foreign companies; lower taxes for the middle and working class like we did in the 1950's; roll back the red tape and tort on U.S. startups; E-Verify the nation and end the illegality of the Spanish-speaking immigrant networks that refuse to hire American citizens that are not friends and family members, etc...
U.S. businesses have fifty state choices to operate in using American labor. They cannot simply abandon the U.S., except as a place to dump their goods and services. And, labor unions undergo reform so we don't have a repeat of the situation that occurred in the 1970s.
This funds the government and invigorates the middle-class which expands competing with the large business space in hiring the working class (and poor) at decent wages (not minimum wage retail outlets which dump foreign made goods on the public after decimating all middle and working class in the spaces they took over) and greatly reducing unemployment. This protects American jobs from illegal workers and illegal immigrant networks. Since American citizens actually spend their money in the U.S., instead of sending it out of the country to support relatives, it further drives economic domestic recovery and economic expansion around the world.
The tea party is unwittingly pushing us the wrong way into a new American caste system where everyone but the super rich become poorer by the year. But then the GOP has been going down this road for a long time.
Reagan signed the great amnesty and engaged in massive deficit spending and every other Republican administration has since. They outspent the Democrats, who under Clinton managed to incur a surplus which the Republicans spent during the Bush years and then continued running massive deficits beyond anything the Democrats did in the years since Reagan.
Ronald Reagan must be credited for winning the Cold War with this tactic of massive deficit spending on the military; however, the Republicans chose to continue the practice while passing unfair "free" trade legislation with its offshoring and outsourcing; tax cuts for the rich; massive immigration and insourcing, etc... which when coupled with Democrat mismanagement in almost all of these same areas led us into the situation we are in today.
It can even be argued that initially, Obama simply implemented the previous administration's bailout and spend philosophy after the Bush administration wasted a taxpayer fortune to charge Iraq for still missing WMDs instead of stopping a domestic economic meltdown caused by systemic changes in our economy, the trade imbalance, credit bubble, post-financial deregulation debacle, and housing bubble though it is true that the Bush administration and the Republicans did try to reign in Fannie and Freddie (but the Democrats would not let them). Afterwards, Obama certainly displayed a massive deficit spending philosophy of his own.
The truth is that Democrats are simply not fiscally conservative and the Republicans are primarily fiscally conservative these days when it comes to hurting Americans in a Great Recession. Both ignore most of what needs to be fixed. Both want to make things worse for most Americans.
They pay a fortune to ensure the military defense of wealthy Asian and European countries that should be paying for their own defense. They spend another fortune fighting wars all over the globe... most of which are unnecessary. They seek deep tax cuts for the rich and trade legislation that only helps the wealthiest Americans and corporations but hurts American workers and small businesses. They won't even give them a fair chance by considering adjustable value added taxes (VAT) on foreign goods and services. They won't fix healthcare. They ignore government public employee unions and pensions and their own partisan pork. Etc...
And we simply cannot innovate our way out of this. This is because the way business is done has changed as a result of the free trade legislation. It used to be that innovation happened here, was closely protected, and wielded to give the USA and the world what they needed and wanted using American labor.
Increasingly today, innovation happens here and there and the innovation that occurs here is simply shipped overseas as fast as possible to China, India, etc... where foreign labor is used to produce the goods that are then shipped back and dumped on the American public through large public corporate retail chains. It's a pail with a big hole in the bottom. You pour the idea creation, invention, innovation water in and it runs out the bottom into other countries buckets.
Then there’s the issue of massive illegal immigration and chain migration from the poorest of Latin America which has materially affected state’s safety nets, taxpayers, and economy in negative ways. Instead of bringing the brightest people on the planet and making them Americans, we simply allowed the poorest to violate our laws… those least able to contribute to America and gave them and their children citizenship without ever properly enculturating them to be Americans.
Should we give them a path to citizenship at this point? Some say we should and some say we should not. Personally, we believe we can by opening up the normal process of becoming an American to them (no amnesty) IF we implement a national E-Verify program, alter our open chain migration policy, and dismantle the sprawling Spanish-speaking immigrant networks that have taken hold of entire industries in the Southwest and actively block non-Hispanics from them.
We need to create loyal Americans who can really contribute to our country and economy... not Americans-In-Name-Only (AINO) who have no idea what it means to be an American and whose loyalty is to another country. Dual citizenship does not make us stronger.
Both parties are responsible for the current economic mess and pursuing policies that hurt Americans instead of fixing them in a way that is good for Americans. But you have to look at the facts, instead of the hyperbole coming from both parties, to understand this.
Read this: Why Wall Street Protestors Are Angry!
Support this: Citizens for Responsibility and Ethics in Washington DC (CREW)
Watch this: Park Avenue: Money, Power & The American Dream (2012)
Statistically, the top one percent are becoming wealthier even as the working and middle class become poorer. The tea party means well but, unfortunately for America, are bent on hurting Americans to "fix" the problem rather than simply fixing the problem.
As John Hamilton, retired U.S. Foreign Service officer, points out:
"The distribution of our national income has become severely skewed. It is worse than in every single country of the Middle East and approaches Latin America's discord-sowing levels. On the Gini Index, where higher numbers represent higher inequality, the U.S. comes in at 45. For comparison, the numbers in Latin America range from 41 in Venezuela to 59 in Haiti. With a score of 23, Sweden leads all nations in having the most equal distribution of income.
The growing income inequality has been fueled by years of free trade policies, corporate offshoring of jobs, tax cuts for the rich and deregulation of the financial industry.
Such inequality throttles economic development. In the United States, the economic activity of a robust middle class has been an important driver of growth. Until recently, that is. In 1970, when our Gini coefficient was 39.4, the wealthiest 1 percent of Americans took in 9.7 percent of national income. That was a lot, but today the equivalent figure is 23.7 percent. The wealthiest one-tenth of 1 percent receives an astonishing 12.3 percent of national income.
According to former Secretary of Labor Robert Reich, middle-class economic activity is no longer generating new growth and jobs. As the purchasing power of the middle classes declined after 1970, families coped for a time. Women earned a second income; all workers put in longer hours and families drew on the equity in their homes. As those strategies are now exhausted, job growth is anemic. And because the wealthy can spend only a fraction of their income, they are not generating new growth either."
Hedge fund managers, for example, have their fee-derived income taxed at 15%. As Warren Buffet famously noted, he pays a lower rate of income tax than his salaried secretary. In the 1950's hedge funds had not caught on and the rich paid much higher capital gain taxes. The top marginal income tax rates for the super rich were over 90 percent. With John Kennedy's tax cut, the top rate dropped to 70 percent. Corporate taxes were almost 50 percent. This fueled a massive growth for the middle class whose taxes were very low and resulted in very low unemployment.
Today the super rich pay a small hedge fund tax and greatly reduced income tax. If the latest GOP tea party tax cut legislation for the rich goes through the Senate and is signed into law, the super rich income tax rate will drop to a mere 25 percent.
Meanwhile, what's left of the the middle and working classes make up the difference in federal and income tax rates while the poor join them in ever-increasing consumption taxes, sales taxes, fines, and fees. The middle class in particular is sinking into the mire and out of sight!
So what happens when the country decides not to materially tax the top one percent or public corporations any more, despite their accounting for an ever increasing percentage of national income which often doesn't get spent? The simple answer is: they go after the rest of us.
Government is currently seeking consumption taxes, fees, and fines at record levels. They are after taxes on Internet purchases, the gas pump, and almost any and every imaginable way they can come up with to get more money from you and I (even as they are seeking ways to slash medical care to the poor and soon-to-be elderly though government public employee unions who live off of tax dollars are mostly protected).
This hurts the poor, blue, and middle classes, but not the super-wealthy or the corporations. Contrast the GOP proposed 25 percent tax rate for the super rich with the super rich tax rate of about 90 percent in the 1950's which fueled a huge middle class that hired American workers after the Great Depression.
Knowing this, we have to wonder why middle-class Americans line up and pull the lever at voting time to ensure the rich get richer and everyone else gets poorer. Is it a passionate ignorance rooted in a disconnect and escapism?
The GOP Ryan plan will strip away Medicare and Social Security benefits for everyone under 55 (despite them paying into the fund their entire working lives), eliminate much student aid, make healthcare more inaccessible, encourage states to raise taxes through increasing state taxes, sales taxes, consumption taxes, fees, and fines yet will slash taxes on the rich to record lows while ignoring the issues of trade reform, corporate offshoring of jobs, deregulation of the financial industry, etc... all of which benefits the top 1 percent but hurts the American worker and small businesses.
But here's the real problem with the GOP tea party best thinking:
The rich are the primary investors in the large public corporations which have been moving into middle class spaces and offshoring, outsourcing, and insourcing middle and working class American labor to other countries citizens rather than Americans now for a couple decades. This has created a hollowed out middle class, a poorer working class, more poor, and high unemployment (i.e. the unemployment rate doesn't account for the number of actual unemployed Americans).
The public corporate takeover of the middle and working class space has been likened to locust swarms of old that flew in, consumed everything in their path, and left nothing behind them but big retail centers to dump their foreign made consumption junk (which is now rising in price since demand for it overseas has increased) on what's left of America.
This is not an anti-corporation article. The small private corporations of the middle-class, employee owned corporations, and yes large public corporations have a healthy role to play in our economy. But what's been allowed to occur is unbalancing the nation and any real solution must account for it.
All of this has put tremendous pressure on the middle and working American classes and they spawned the tea party in an attempt to address it. Unfortunately, they really don't understand what we've shared and so they voted for corporate sponsored and paid for GOP legislatures to do something about it. What do you think those legislatures are doing?
They are taking steps to ACCELERATE the problem by giving big tax cuts to the rich and ensuring corporations can continue to operate without paying federal taxes so the large public corporate takeover of the middle class space continues faster hurting both Americans and the national interest.
The choice here:
1. You can reduce taxes on the rich and large public corporations more and further accelerate the decline of the middle and working classes hurting them and the poor and driving us right into a new American caste system.
2. You can raise taxes on the rich; close the ability of U.S. businesses to structure as flow-throughs or relocate outside the country to avoid paying taxes and reform their loopholes; implement adjustable value added taxes on all products and services sold in the U.S. that use foreign labor for both American and foreign companies; lower taxes for the middle and working class like we did in the 1950's; roll back the red tape and tort on U.S. startups; E-Verify the nation and end the illegality of the Spanish-speaking immigrant networks that refuse to hire American citizens that are not friends and family members, etc...
U.S. businesses have fifty state choices to operate in using American labor. They cannot simply abandon the U.S., except as a place to dump their goods and services. And, labor unions undergo reform so we don't have a repeat of the situation that occurred in the 1970s.
This funds the government and invigorates the middle-class which expands competing with the large business space in hiring the working class (and poor) at decent wages (not minimum wage retail outlets which dump foreign made goods on the public after decimating all middle and working class in the spaces they took over) and greatly reducing unemployment. This protects American jobs from illegal workers and illegal immigrant networks. Since American citizens actually spend their money in the U.S., instead of sending it out of the country to support relatives, it further drives economic domestic recovery and economic expansion around the world.
The tea party is unwittingly pushing us the wrong way into a new American caste system where everyone but the super rich become poorer by the year. But then the GOP has been going down this road for a long time.
Reagan signed the great amnesty and engaged in massive deficit spending and every other Republican administration has since. They outspent the Democrats, who under Clinton managed to incur a surplus which the Republicans spent during the Bush years and then continued running massive deficits beyond anything the Democrats did in the years since Reagan.
Ronald Reagan must be credited for winning the Cold War with this tactic of massive deficit spending on the military; however, the Republicans chose to continue the practice while passing unfair "free" trade legislation with its offshoring and outsourcing; tax cuts for the rich; massive immigration and insourcing, etc... which when coupled with Democrat mismanagement in almost all of these same areas led us into the situation we are in today.
It can even be argued that initially, Obama simply implemented the previous administration's bailout and spend philosophy after the Bush administration wasted a taxpayer fortune to charge Iraq for still missing WMDs instead of stopping a domestic economic meltdown caused by systemic changes in our economy, the trade imbalance, credit bubble, post-financial deregulation debacle, and housing bubble though it is true that the Bush administration and the Republicans did try to reign in Fannie and Freddie (but the Democrats would not let them). Afterwards, Obama certainly displayed a massive deficit spending philosophy of his own.
The truth is that Democrats are simply not fiscally conservative and the Republicans are primarily fiscally conservative these days when it comes to hurting Americans in a Great Recession. Both ignore most of what needs to be fixed. Both want to make things worse for most Americans.
They pay a fortune to ensure the military defense of wealthy Asian and European countries that should be paying for their own defense. They spend another fortune fighting wars all over the globe... most of which are unnecessary. They seek deep tax cuts for the rich and trade legislation that only helps the wealthiest Americans and corporations but hurts American workers and small businesses. They won't even give them a fair chance by considering adjustable value added taxes (VAT) on foreign goods and services. They won't fix healthcare. They ignore government public employee unions and pensions and their own partisan pork. Etc...
And we simply cannot innovate our way out of this. This is because the way business is done has changed as a result of the free trade legislation. It used to be that innovation happened here, was closely protected, and wielded to give the USA and the world what they needed and wanted using American labor.
Increasingly today, innovation happens here and there and the innovation that occurs here is simply shipped overseas as fast as possible to China, India, etc... where foreign labor is used to produce the goods that are then shipped back and dumped on the American public through large public corporate retail chains. It's a pail with a big hole in the bottom. You pour the idea creation, invention, innovation water in and it runs out the bottom into other countries buckets.
Then there’s the issue of massive illegal immigration and chain migration from the poorest of Latin America which has materially affected state’s safety nets, taxpayers, and economy in negative ways. Instead of bringing the brightest people on the planet and making them Americans, we simply allowed the poorest to violate our laws… those least able to contribute to America and gave them and their children citizenship without ever properly enculturating them to be Americans.
Should we give them a path to citizenship at this point? Some say we should and some say we should not. Personally, we believe we can by opening up the normal process of becoming an American to them (no amnesty) IF we implement a national E-Verify program, alter our open chain migration policy, and dismantle the sprawling Spanish-speaking immigrant networks that have taken hold of entire industries in the Southwest and actively block non-Hispanics from them.
We need to create loyal Americans who can really contribute to our country and economy... not Americans-In-Name-Only (AINO) who have no idea what it means to be an American and whose loyalty is to another country. Dual citizenship does not make us stronger.
Both parties are responsible for the current economic mess and pursuing policies that hurt Americans instead of fixing them in a way that is good for Americans. But you have to look at the facts, instead of the hyperbole coming from both parties, to understand this.
Read this: Why Wall Street Protestors Are Angry!
Support this: Citizens for Responsibility and Ethics in Washington DC (CREW)
Watch this: Park Avenue: Money, Power & The American Dream (2012)
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