Income Inequality

September 24, 2010 § 1 Comment

I have written about the growing degree of income and wealth inequality in America.  A friend of mine, Milton Lower, has sent to me a link to a September, 2010 Report by the U.S. Congress Joint Economic Committee.  The Chairman of that Joint Committee is Representative Carolyn B. Maloney.  The Vice Chairman is Senator Charles E. Schumer.

The eleven page report and the graphs that illustrate it tell a story of greed and unfairness, the erosion of the middle class and the immoral enrichment of the wealthiest Americans.   It also provides irrefutable evidence of the difference between the Republican Party and the Democratic Party, as well as the consequent effect of those differences on the welfare of middle class Americans.

Anyone who thoughtfully reads this report can understand the mistake of those who preface their political opinions by saying, “I just vote for the person.  I don’t pay attention to political parties.”  Middle class Americans pay a high price for the consequences of that kind of ignorance.  I does matter which party controls the economic policies of our nation and this report’s history lesson proves it.  Here is the link to the report:

http://jec.senate.gov/public/?a=Files.Serve&File_id=91975589-257c-403b-8093-8f3b584a088c.

Bob

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§ One Response to Income Inequality

  • Terry says:

    If you did not see Countdown with Keith Olbermann on Wednesday night, September 22, 2010, I would urge you to go to the Countdown website and watch the first segments on “Small In Name Only” in which Olbermann explains Representative Boehner’s (House Minority Leader – Republican) comment that letting the tax cuts for the wealthiest Americans will adversely affect “small businesses.”

    Responding to questions in one of the Sunday talk shows, Boehner agreed that letting the tax cuts for the wealthy expire would affect only three percent of “small businesses,” but justified Republican’s angst over that three percent, because that three percent was responsible for “fifty percent of the income of ‘small busineses’.” That should have set off some alarm bells somewhere in the media – but only Olbermann further investigated. What he discovered is that Republicans are defining the term “small business” in the same way they define other terms – through the Looking Glass.

    “Small Businesses,” according to Mr. Boehner means businesses that have a “small” number of owners, not businesses that are small in number of employees, or revenue, or family owned, or any other commonly understood definition of “small business.” What this means is that any business that is a “pass through entity” – that is where the income of the business is not reported or taxed at the corporate level, but is “passed through” to the owners to be reported (and supposedly) taxed on the owners’ individual tax returns — e.g. partnerships and limited liability companies– is a “small business.” You might be interested to learn that under this definition, Bechtel (one of the largest businesses in the world) is a “small business.” Most of the hedge funds and investment banks are “small businesses.” And the source of the wealth of most of the wealthiest people in this country are their ownership of numerous “small businesses.”

    As Olbermann explained, there are a few important points about the “pass through” and taxing of the income of these “small businesses” at the individual level. First, before the income is “passed through” the “small business” gets to take advantage of netting all its expenses against its revenues – a privilege that is not afforded individuals whose income is earned through wages. For example, an individual cannot depreciate or expense purchases that are necessary to allow him or her to work – like the car or bus tickets, but the “small business” can. (To be fair, the tax code does allow an individual to deduct certain “unreimbursed” business expenses, but rules and restrictions under the tax code make this deduction virtually impossible for most wage earners.) Second, a provision of the tax code allows these “small businesses” to defer the tax liability (i.e. not pay)for up to 15 years – unlike wage earners whose income is withheld and paid to the government in advance of the time it is due to be paid. This means that wage earners (97% of the tax payers) are subsidizing through their withheld wages the deferred tax liability for these “small businesses.”

    And it gets worse. There are 403 billionaires in America. Thanks to the Supreme Court’s helpful “Citizens’ United” decision, many of these billionaires (like the Koch brothers) are directly funding the Republican and Tea Party candidates. (I am beginning to believe that the Tea Party is just the final result of a deliberate plan to destroy the public education system in this country so as to produce a pliable, easily manipulated citzenry, incapable of or unwilling to engage in logical or critical thought, whose only purpose is to produce wealth for their corporate owners.) So now, not only is the wealth of this country owned by a few, but the political voice is as well. If Mr. Boehner starts touching his forelock when defending his overlords, at least he will be being honest.

    One final comment about the “Citizens’ United” decision. In Bush v. Gore, the Court determined that allowing a recount of votes in those precincts where there appeared to be problems with the vote counting, violated the equal protection clause of the Constitution because it might “dilute” the votes of individuals in precincts that were not suspected of having vote problems. But, allowing the political speech of corporations (that can’t vote) to drown out the political speech of individuals (that can vote) is not a problem. “All animals are equal, but some animals are more equal than others.”

    Like

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