Tag Archives: trickle down

Average income increase for 90% of us over the past 40 years: a whopping $59.00

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Average income rose just $59 from 1966 to 2011 for the bottom 90 percent once those incomes were adjusted for inflation… the top 10 percent fared much better, according to a new study of tax data from David Cay Johnston, Pulitzer Prize winner: In 2011 the average AGI of the vast majority fell to $30,437 per taxpayer, its lowest level since 1966 when measured in 2011 dollars. The vast majority averaged a mere $59 more in 2011 than in 1966. For the top 10 percent, by the same measures, average income rose by $116,071 to $254,864, an increase of 84 percent over 1966.

[...] The biggest driver in that disparity, Cay Johnston wrote, was not that the rich were working harder, “but the shift of income from labor to capital and changes in federal income, gift, and estate tax rules.” Indeed, the estate tax has been eased over recent decades and federal income taxes have become more favorable to the wealthy thanks to breaks for investment income. A recent study, in fact, found that the capital gains tax cut, which benefits the wealthy but does virtually nothing for everyone else, was “by far” the biggest driver in the growth of American income inequality.

Other important facts: 

(via ThinkProgress)

The rise in wealth inequality? It’s permanent: “the advantaged [are] becoming permanently better-off, while the disadvantaged becoming permanently worse-off.” [...] If we were seeing a lot of transient inequality, that would mean the households at the bottom in any given year still have a good shot at improving their lifetime earnings. The fact that the inequality is of the permanent sort shuts the window on that optimistic interpretation: The earners at the bottom are stuck at the bottom, and their lifetime earnings are about as low as one would think. (via Ezra Klein)

With this ever-increasing, permanent inequality, now decades in the making, what’s most important to Republicans? 95% of the GOP-led House voting in favor of Paul Ryan’s Class Warfare Budget:

  • Recent analyses have shown that [Ryan's] budget plan’s tax reforms, which lower top tax rates to 25 percent, would give millionaires at least $200,000 in tax cuts. At the same time, it would slash the social safety net, targeting poverty programs for two-thirds of its cuts. (via Travis Waldron)
  • Ryan’s budget would end Medicare, cut taxes by over $5 trillion, take health care benefits away from millions of Americans, make “massive” cuts to in programs for low-income and vulnerable Americans, and relies on smoke and mirrors to balance the budget within a decade… It’s designed to satisfy folks who believe the wealthy are over-burdened by taxes and struggling families have too much access to affordable health care. (via Steve Benen)

Unfortunately the non-wealthy, low-info Republican base voters — who have been personally harmed by income inequality just like everyone else — have been successfully programmed to chase the regularly-scheduled and completely manufactured social outrages dangled before them (usually involving guns, God, and gays), instead of paying attention to what their party is actually doing with tax laws and budgets.

Republicans as the anti-tax party: when political ideology matters more than balancing a budget

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The New York Times notes the last time any Congressional Republican voted for a tax increase was for the budget deal crafted in 1990.

“The conservative revolt against that 1990 legislation — and against President George Bush, who violated his own ‘Read my lips’ vow not to increase taxes — was a seminal moment for Republicans. The party of balanced budgets became the party that opposed tax increases.”

“Republicans continue to embrace the no-new-taxes stand as a centerpiece of the party’s identity, even in the face of public opinion that strongly supports tax increases on high incomes. And some Republicans fear that the party’s commitment to prevent tax increases more and more is coming at the expense of those other, older kinds of fiscal responsibility.”

(via Political Wire)

Also from the Times article:

“Republicans used to be interested in not running continual rivers of red ink,” said former Representative William Frenzel, a Minnesota Republican who as the ranking member of the House Budget Committee in 1990 helped to negotiate the deficit deal. “If that meant raising taxes a little bit, we always raised taxes a little bit. But nowadays taxes are like leprosy and they can’t be used for anything, and so Republicans have denied themselves any bargaining power.” [...]

In the early 1980s, majorities of Congressional Republicans voted for a pair of deficit deals orchestrated by President Ronald Reagan, even though tax increases accounted for more than 80 percent of the projected reductions. But by 1987, a majority of Republicans opposed a third deal, even though only 37 percent of the reductions came from tax increases. [...]

“When I entered politics, the frame of reference was a balanced budget as the principle conservative precept,” said former Representative James Leach, an Iowa Republican who served from 1977 to 2007. “Today, it’s the level of taxes.” 

The Walton family and trickle-down

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Consider where you want your hard-earned money going on Black Friday. Maybe you don’t want it going straight into the already heavy-lined pockets of the Walton children and their over-paid CEO?

[Walmart's] role as [the] marginal employer [in many US counties] often serves to drive down workers’ wages county-wide. …Concretely, between 2007 and 2010, while median family wealth fell by 38.8 percent, the wealth of the Walton family members rose from $73.3 billion to $89.5 billion …In 2007, it was reported that the Walton family wealth was as large as the bottom 35 million families in the wealth distribution combined, or 30.5 percent of all American families. And in 2010, as the Walton’s wealth has risen and most other Americans’ wealth declined, it is now the case that the Walton family wealth is as large as the bottom 48.8 million families in the wealth distribution (constituting 41.5 percent of all American families) combined.

— Inequality, exhibit A: Walmart and the wealth of American families | Economic Policy Institute

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current: Before you hit the streets on Black Friday to shop till you drop here are some key figures about Wal-Mart’s powerful position compared to its employees that might make you think twice about what retailers to support.

1.3 million – Wal-Mart employees in the United States. Wal-Mart is the largest private employer in the world.

$15.7 billion – Wal-Mart’s 2011 profits. The company is currently number 2 on the Fortune 500.

$8.75 per hour – average starting salary for a new Wal-Mart employee. That’s turns out to be an annual salary of $15,500, which is about even with the federal poverty level for a 2-person household.

$8,653 per hour – Wal-Mart CEO Michael Duke’s $18 million annual salary converted to a 40 hour-a-week hourly wage.

$13 per hour – Hourly wage the OUR Walmart group is demanding from Wal-Mart.

$4.83 million – The fine Wal-Mart agreed to pay the U.S. Department of Labor in 2012 for failing to pay overtime wages to more than 4,500 employees nationwide, .

$56,068.58 – Online donations received to sponsor striking employees on Black Friday.

12 – number of cities where Wal-Mart is currently facing strikes since October 4, 2012.

0 – number of strikes Wal-Mart has faced since 1962.

$312 billion — Wal-Mart’s revenue in 2005.

4,700 – number of children of Wal-Mart’s Alabama employees receiving Medicare assistance in 2005.

16 million – the number of US children – that’s 1 in 6 – that struggle with hunger. As Current has previously reported, roughly 20 percent of American children live in a home with parents who are unable to regularly put food on the table.

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What the public wants: the Democratic responsibility to The Mandate

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Charlie Pierce points out the responsibility that the Democrats have, and more specifically, that President Obama now has after this election:

In short, and on the pure politics of it, there’s really nothing to negotiate. The public wants a more progressive tax code with fewer loopholes for the wealthy. (The carried-interest loophole is a disgrace to an evolved democracy.) The public wants programs like Social Security and Medicare strengthened, but not by “reforming” the guaranteed-benefit part of them out of the equation. The public wants more regulation on Wall Street than even Dodd-Frank has given us. The public has tumbled to the fact that the rising-tide-lifts-all-boats, trickle-down palaver has been a scam all along. You know what happens with a rising tide if you don’t have a boat? You drown.

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One of the real problems in this country has been that the Republicans have taken extreme positions and paid no lasting political price for them. They’ve lost elections, certainly, but elections are not the only place where a political price must be paid. It must also be paid within the everyday negotiations within which the government functions. It is time to make John Boehner choose between being a responsible constitutional officer, or being the creature of all the bats and flying things that have so damaged the country, and that have so scoured the soul of his party. That’s his problem. The president should give him until after the first of the year to think about it.

Trickle-down disaster relief

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via: 6dogs9cats

Disasters and trickle down economics

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John Cole writes about the broken crane in NYC:

For those of you living in a cave or in one of the areas hit by power outages, the media has continued to run footage of the broken many ton crane dangling from the top of luxury condos in Manhattan… It’s basically the perfect metaphor for trickle down economics and the last three decades. A couple hundred tons of metal death will possibly rain down on the lessers on the ground, the city and taxpayers will have to clean up, and the owners of the $90 million dollar condo will be front and center on the NY Times talking about their “disaster.”

Ben Stein agrees with President Obama: raise taxes on the rich

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Raw Story: Conservative economist Ben Stein on Thursday seemed to know that he had wandered off message when he joked that the hosts of Fox & Friends might murder him for saying that it was not possible to balance the budget without raising taxes:

Ben Stein: “I hate to say this on Fox — and I hope I’ll be allowed to leave here alive — but I don’t think there is anyway we can cut spending enough to make a meaningful difference. We going to have to raise taxes on very rich people, people with incomes of like say, 2, 3 million a year and up, and then slowly move it down.”

Steve Doocy: “You do not think Washington just has a spending problem?

Stein: “I do not think they just have a spending problem. I think they also have a too-low taxes problem. And while all due respect to Fox, whom I love like brothers and sisters, the taxes are too low.”

The economist noted that even more revenue could have been brought in during President George W. Bush’s presidency if taxes had not been cut.

Stein: “The evidence is that there is no connection between the level of taxation and the level of economic activity. The biggest growth we’ve ever had in this country was roughly 1941 to roughly 1973, that was the best years we ever had and those were years of much, much higher taxes than we have now, during war time and during peace time. So, the economy can grow very fast, even with much higher taxes. And we’re going to have to do something.”

Doocy: “Taxes were like 70, 80 percent!”

Stein: “I know. And yet, we were very prosperous, we were extremely prosperous. I mean, the highest rate was in the 90s during parts of the 50s and, yet, we were very prosperous.”

When conservative jackwagons like Stein wander off-message and/or are uncharacteristically honest, it turns out that President Obama is correct and Mitt Romney is wrong.

But, ultimately, this will be Good News for Romney. Right, Gallup?

“Often the best route to wealth isn’t competing… but lobbying Congress for a tax break”

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Why Let the Rich Hoard All the Toys? Nicholas Kristof: 

Americans seem by intuition to be flaming lefties. A study published last year by scholars from Harvard Business School and Duke University asked Americans which country they would rather live in — one with America’s wealth distribution or one with Sweden’s. But they weren’t labeled Sweden and America. It turned out that more than 90 percent of Americans preferred to live in a country with the Swedish distribution.

Perhaps nothing gets done because, in polls, Americans hugely underestimate the level of inequality here. Not only do we aspire to live in Sweden, but we think we already do.

[...] Likewise, the Institute for Policy Studies in Washington estimates that four major tax breaks that encourage excessive corporate pay cost taxpayers $14.4 billion last year. And 26 chief executives received more in pay last year than their companies paid in total federal corporate income taxes.

Compare $14.4 billion to the $445 million which the federal government gave to PBS this year. Is firing Big Bird, as the King of Bain suggested, really going to solve anything? It’s appalling — or it should be — that the wealthiest people no longer necessarily build or produce anything (especially jobs with a living wage). They just lobby for more tax breaks, loopholes, and benefits to increase their wealth — which costs the government needed revenue and will cause austerity spending cuts for the rest of us, for balance. Big Bird is only the start of trickle down in action.

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Politics aside, people know in their hearts what’s right and what’s wrong. But too many are blinded by conservative spin. From Building a Better America−−One Wealth Quintile at a Time (warning: PDF):

“For the first task, we created three unlabeled pie charts of wealth distributions, one of which depicted a perfectly equal distribution of wealth. Unbeknownst to respondents, a second distribution reflected the wealth distribution in the United States; in order to create a distribution with a level of inequality that clearly fell in between these two charts, we constructed a third pie chart from the income distribution of Sweden (Fig. 1).”

“Figure 2 shows the actual wealth distribution in the United States at the time of the survey, respondents’ overall estimate of that distribution, and respondents’ ideal distribution. These results demonstrate two clear messages. First, respondents vastly underestimated the actual level of wealth inequality in the United States, believing that the wealthiest quintile held about 59% of the wealth when the actual number is closer to 84%. More interesting, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution, reporting a desire for the top quintile to own just 32% of the wealth. These desires for more equal distributions of wealth took the form of moving money from the top quintile to the bottom three quintiles, while leaving the second quintile unchanged, evincing a greater concern for the less fortunate than the more fortunate (Charness & Rabin, 2002).”

Why Obama Now

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An animated short about the big choice in 2012′s presidential election
- by Simpsons / Family Guy animator Lucas Gray
- also available at http://whyobamanow.org/

(via: sarahlee310)

It’ll trickle down. Go back to Dancing with the Stars.

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theamericanbear: It’ll trickle down. Go back to Dancing with the Stars.

from Mother Jones

Last Sunday, 9/24/2012:

Scott Pelley, 60 Minutes: Now you made, on your investments, personally, about $20 million last year. And you paid 14 percent in federal taxes. That’s the capital gains rate. Is that fair to the guy who makes $50,000 and paid a higher rate than you did?
Romney: It is a low rate. And one of the reasons why the capital gains tax rate is lower is because capital has already been taxed once at the corporate level, as high as 35 percent.
Pelley: So you think it is fair?
Romney: Yeah, I think it’s the right way to encourage economic growth, to get people to invest, to start businesses, to put people to work.

It’s not for nothing that George W. is the headliner at the upcoming Cayman Alternative Investment Summit. He’s probably the reason there’s a Summit there to begin with:

When crony capitalism is like communism

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“When the economy is understood in 21st-century terms, as an ecosystem, it becomes obvious that jobs don’t squirt out of business-people like jelly from doughnuts. Rather, jobs are the consequence of the feedback loop between customers and businesses. For this reason, it is middle-class consumers and the demand they create that are our true job creators, not rich business-people. Given this, it is counter-productive to build a tax system that asymmetrically benefits the people at the very top. We all are better off — business-people and consumers, rich and poor — if the burden of taxes is placed at the top and not the middle, enabling middle class citizens to consume, and starting the positive feedback loop of job creation again.”

— Rich Americans Aren’t the Real Job Creators (via azspot)

“The crony capitalism that we have allowed to infect the U.S. economic system shares weaknesses with communism. A tax system that amplifies compounding advantages for business-people and corporations the higher up the food chain they go and compounds disadvantages for people at the bottom is bad for business. It slows the rate at which ideas are generated and problems are solved. The healthiest ecosystem or economy is one with the most diverse, able competitors, not one overrun with one or two dominant species.”

Communism is state capitalism, in which all or most means of production are owned and controlled by “the state”, and few or no means of production are owned and controlled by individuals. (Progressive Living)

Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of dirigisme. (Wikipedia)

Graph: Tax cuts don’t generate economic growth — they just generate more income inequality

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Are you going to believe the party of the one percent or your own lying eyes?

Cutting The Bull On Taxes – The Dish | By Andrew Sullivan – The Daily Beast

Sullivan: “After a terrific David Leonhardt piece, Derek Thompson highlights the findings of a Congressional Research Service study (pdf) – that tax cuts don’t generate economic growth. Thompson summarizes:

“Analysis of six decades of data found that top tax rates “have had little association with saving, investment, or productivity growth.” However, the study found that reductions of capital gains taxes and top marginal rate taxes have led to greater income inequality…. Well into the 1950s, the top marginal tax rate was above 90%. Today it’s 35%. But both real GDP and real per capita GDP were growing more than twice as fast in the 1950s as in the 2000s. At the same time, the average tax rate paid by the top tenth of a percent fell from about 50% to 25% in the last 60 years, while their share of income increased from 4.2% in 1945 to 12.3% before the recession.

“Meanwhile, Leonhardt recalls how Paul Ryan reflected on the above chart in one of their conversations: “I wouldn’t say that correlation is causation,” Mr. Ryan replied.” 

In other words, the Republican Party in general — and Mitt Romney and Paul Ryan specifically — are asking the working and middle class to continue to subsidize the increasing wealth of the super rich while our own incomes, and the federal treasury, continue shrinking each year.

Mitt Romney’s tax plan: doubling-down on the magical thinking of voodoo economics

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FOR SEVERAL weeks, we’ve been asking Republican presidential nominee Mitt Romney to explain how he can cut taxes, as promised, without adding to the nation’s debt, as also promised. Now he’s effectively let the cat out of the bag: He can’t.

“On Friday, ABC’s George Stephanopoulos put the question to the candidate. “No, middle income is $200,000 to $250,000 and less,” Mr. Romney replied. But then, the Harvard study shows, the math can’t work. His answer? “The biggest source of getting the country to a balanced budget is not by raising taxes or by cutting spending,” he said. “It’s by encouraging the growth of the economy.” In other words, we are back to counting on magic — to “dynamic scoring,” the voodoo economics of the Reagan era, the wishful thinking of President George W. Bush’s 2001 and 2003 tax cuts that helped turn a surplus into the deficit now weighing the nation’s economy. Cut taxes and hope the economy grows faster than predicted. At a time when the nation is already on course to build up a debt so large that interest payments alone will begin to drown us, Mr. Romney wants to reduce taxes further, with — it now appears — no plan to make up the difference.

“It almost takes your breath away.”

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There’s a reason Romney wants to double-down on the failed economic policies of Reagan and GWB: