Monday, January 18, 2010

Wealth Distribution for the Rich and Famous: Part II.


Here's a little right wing mantra that often turns up in emails and on political discussion boards.  It's usually attributed to Abraham Lincoln, wrongly, of course.

You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away men's initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves. (February 12, 1809 – April 15, 1865) Assassinated [see also "William Boetcker"]



Lincoln, Abraham
 
It was actually said by William Boetcker, a conservative preacher who, I guess, was hoping for a little "trickle down" action.
 
An outspoken political conservative, Rev. Boetcker is perhaps best remembered for his authorship of a pamphlet entitled The Ten Cannots. Originally published in 1916, it is often misattributed to Abraham Lincoln. The error apparently stems from a leaflet printed in 1942 by a conservative political organization called the Committee for Constitutional Government. The leaflet bore the title "Lincoln on Limitations" and contained some genuine Lincoln quotations on one side and the "Ten Cannots" on the other, with the attributions switched. The mistake of crediting Lincoln for having been the source of "The Ten Cannots" has been repeated many times since, most notably by Ronald Reagan in a speech he gave at the 1992 Republican convention in Houston.
 
Right wingers eat that stuff up and use it to try to frame the arguement that the left is trying to loot the coffers of the benevolent rich from which all good things in life come.
 
Not only is the right wrong about who said it, it's also wrong in its premise.  The fact of the matter is, if we don't rein in the top 1%, the rest of us are going to have squat.  The chart at the top of the page is from 2001 when the top 1% controlled 33% of the wealth in this country.  Six years of right wing controlled government had raised that to 42%
 
Apparently, they want it all.
 
In the meantime, former Bush Press Secretary Ari Fleischer has a WSJ op-ed arguing that our tax collections are too skewed towards the higher end and that the the middle and the poor don't pay enough. His argument is that it's just plain bad that 50% of the population don't pay income taxes -- that they don't have their skin in the game. That it's fundamentally bad for democracy.
 
Yeah, the working class don't have any "skin in the game".  They only generate this country's economy by putting practically all their income right back into it.  Jerk.
 
As a matter of math, Fleischer is probably right. The idea that we can continue to raise revenue, while shifting more of the burden onto fewer and fewer people is a pipe dream. Think of the grand scale of the government's ambitions, from fighting wars to providing universal healthcare. Are we really to believe that all this can be done via a tax increase on the top 2%? That's obviously hogwash. What's more is that top 2% is getting sharply poorer fast, given the collapse of the financial industry.



The rich can afford their cheerleaders, not to mention the media, in order to get their "poor little billionaire" message out.  And if the working class says anything, the "class warfare" meme will be drug out and waved like the bloody shirt.
 
All of this has just been a segue into an excellent article from My Budget 360 titled How the Average American household making $52,000 a Year is Coping while the Ultra Rich Pull Away. Examining the new Numbers on Income Distribution in the United States.
 
Here's some relevant passages.
 
Now that tax season is rolling around average Americans are examining the implications of a difficult 2009 economy. Yet the data on typical families shows that many Americans are falling further and further behind in this current economy. It is sobering to realize that over 14 million American households live on $15,000 or less per year. These statistics usually get lost in the noise of protecting the wealthy class with their generous tax breaks. But when we examine the data even further we realize that even those with solid incomes of $100,000 to $200,000 per year are feeling the tax burden pinch with changes in the alternative minimum tax (AMT). What we can gather from the data is the small elite, the top 1 percent have managed to setup a structure that manages to use the rest of the population to finance their adventure.
 
The extremely wealthy are the people getting all the perks of the current system; accounting gimmicks, offshore accounts, capital gains tax rates that are favorable, and other items like carryover losses that most Americans never even deal with. The bailouts, the tax breaks, and items that specifically only improve their bottom line.
 
In fact an income of $100,000 or more a year puts you in the top 15 percent of wealth earners in this country. Looking at 2006 IRS records shows that an income of $108,904 would put you in the top 10 percent while an income of $388,806 would put you in the top 1 percent. And here is the real break. Because tax breaks become more generous for the ultra rich especially when a large number live off of capital gains and only pay 15 percent in taxes on this while working grunts have to pay every imaginable tax on the books.
 
And this is exactly what we saw in the following five years and are still seeing. Republicans and Democrats alike seem destined to protect this elite group. Hedge fund gains and Wild West gambling on Wall Street allowed the ultra rich to pull away from the average American pack while not even paying their fair share in taxes. This is still going on by the way since the system also allows carryover losses in stocks and wonderful loopholes to game the system.
 
So we had a major debate for 50,000 tax filers in a nation with over 113,000,000 households? The top 1 percent are betting on you not doing the numbers. They want to keep the game going because it is rigged in their favor. The banking bailouts are largely a transfer of wealth to those who least need it. Until we get this thing under control, the average American is going to feel the pinch of the economy deeper and deeper.
 
We can't rely on our elected officials to help us out.  We have to get together, take back our party and keep our foot firmly on the necks of our politicians to get things straightened out.  So get active, get your friends and relatives together and have them do the same thing.  Get enough like minded people with you and go to the local Democratic Party meetings and take the damned thing over.  Then do the right thing.
 
The top 1% has everything going for it, even the Tea Baggers.  The working class and the poor only have us.  Let's not let them down.  I guess that should be, "Let's not let us down".
 
Be sure to read all of the above article
 
Later.

9 comments:

  1. You might appreciate some of the posts at http://lvtfan.typepad.com/, particularly those related to wealth concentration and income concentration. I've got 2007 data, from SCF and Wolff.

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  2. Your reasoning makes no sense. All I perceive is envy from you. You just want the wealth that others have produced.

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  3. Wow, I love it! Well, apparently, the wealthy think the rest of the population is not as intelligent as they are. It's a sort of "Atlas Shrugged" doctrine of belief, but I'm pretty sure it's the low-income workers and buyers who are holding up the world.

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  4. great post, and I generally agree. But one must compare $15K salary in Boise with a $40K for someone living in New York City. Both have no money and are scraping by. Likewise, $250K in NYC is equal to about $100K in most of the rest of the country.

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  5. Good blog... blog good... any chance you'd want to join forces and combine our mighty powers? http://redneckliberals.blogspot.com/

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  6. BTW, Christian Prophet, when you hear people get mad about the real wealth redistribution in this country - that which goes from bottom to top - it's not envy. It's anger. If someone stole from you, would you be 'envious' that they had your money?

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I did not mean that Conservatives are generally stupid; I meant, that stupid persons are generally Conservative. I believe that to be so obvious and undeniable a fact that I hardly think any hon. Gentleman will question it.

John Stuart Mill (May 20 1806 – May 8 1873)