What If the Greedy Rich Paid Their Share? 8 Things to Know About Wealth and Poverty in the US

We’re far from poor — we just have a wildly lopsided distribution of wealth that makes us seem poor.

From: AlterNet

By:Les Leopold

America is loaded. We are not a struggling nation ready to go under. We are not facing an enormous debt crisis despite what the politicians and pundits proclaim. We are not the next Greece.

Rather, we have an enormous concentration-of-wealth problem — one that must be solved for the good of our commonwealth. We are a very rich nation but it doesn’t seem that way because our wealth is so concentrated in the hands of a few. This is America’s disaster.

But wait. Doesn’t the wealth belong to the super-rich? Didn’t they earn it fair and square? Isn’t that the way it’s always been?

Not by a long shot. The amount of wealth that flows to the super-rich is determined by our public policies. It’s all about how we choose to share our nation’s productivity.

Productivity and the Wealth of Nations

Our country is rich because we are enormously productive as measured by output per hour worked. The greater our collective output per hour, the more our economy produces and the wealthier we are…or should be. It’s not a perfect measure since it doesn’t adequately take into account our environment, our health or our overall well-being. But it is a good gauge of our collective level of effort, skill, knowledge, level of organization, and productive capacity. As the top line on the productivity chart below shows, we’ve been able to produce more and more per hour year after year since WWII. It’s a remarkable achievement.

From 1947 until the mid-1970s, the fruits of our bountiful productivity were shared reasonably fairly with working people. As productivity rose so did workers’ real wages (See the bottom line in the chart below. It represents the average weekly wage of non-supervisory workers who make up about 80 percent of the entire workforce.) This wasn’t socialism. There were still plenty of rich people who earned a significant slice of the productivity harvest. But much of that wealth was plowed back into the economy through taxation rates that between 1947 and 1980 hovered between 70 to 91 percent on incomes over $3 million (in today’s dollars).  Much of that money was used to build our physical and knowledge infrastructures, and to fight the Cold War. Unions were supported by public policy and workers’ real wages rose steadily after accounting for inflation. Wall Street was tightly controlled and the middle-class grew like never before.

Then something happened.

It wasn’t an act of God, or the blind forces of technological change, or the mysterious movements of markets. Nor did the super-rich become enormously smarter than before. Instead, flesh-and-blood policy makers decided that deregulation and tax cuts should become the order of the day starting in the mid-1970s. The idea was that if we cut taxes on the super-rich and deregulated the economy (and especially Wall Street), investment would dramatically increase and all boats would rise. But as we can see from the chart below, the average worker’s wage in real terms stalled and even declined after the mid-’70s. The fruits of productivity no longer were shared equitably. The enormous gap between the two lines (trillions of dollars per year) went almost entirely to the super-rich. The wealth of the wealthy skyrocketed, not by accident, but by policy design. “Greed is good” replaced the middle-class American dream.

What Is Wealth and Who Has It?

Wealth or net worth is the total value of what you own (your assets) minus the total value of your debts (your liabilities.) Our collective net worth is really huge. We’re talking big, big numbers. As of the end of 2011, U.S. households had $30 trillion in private assets and $13.6 trillion in liabilities for a total net worth of $16.4 trillion (PDF). How much is that? It comes to an average of $141,000 per household – free and clear of any debts.

But averages are extremely misleading, because wealth is so highly concentrated at the top. Here are some eye-popping numbers.

1. The number of households with a million dollars or more of net worth grew by 202 percent between 1983 and 2007.

2. The number of households with a net worth of $5 million or more grew by 494 percent.

3. The number of $10 million or more households grew by a whopping 598 percent!

4. There are now more than 464,000 households worth $10 million or more. (PDF)

5. But the bottom 40 percent of American households has a net worth of nearly zero (.2 percent).

6. If you take out the value of our homes, the bottom 40 percent has a negative net worth of minus 1 percent – meaning they owe more than their assets are worth.

7. Meanwhile the top one percent holds 34.6 percent of our total net worth and 42.7 percent of all financial assets (excluding homes).

8. That means that the top one percent has a positive net worth valued at approximately $5,700,000,000,000 (that’s $5.7 trillion).

Why We Need a Financial Transaction Tax

Most Americans live on earned income which is taxed instantly through substantial payroll taxes. You can’t collect a paycheck without paying taxes. The super-rich, however, receive most of their income through financial investments that are taxed at lower capital gains rates and which can be offset through a myriad of deductions and loopholes. In effect, the super-rich live by one tax code and the rest of us use another. This is why the wealthiest Americans pay lower effective tax rates than their servants. It’s also why our government appears to be starved for income. If we want a vibrant economy and good investments in our public infrastructures, the wealthy must pay a great deal more, just like they did during the early post-WWII period.

For starters we need a financial transaction tax which is a small sales tax on each and every financial trade – from stocks and bonds to futures and other derivatives. Since the super-rich hold so many financial assets, this kind of tax would directly target their excessive trading and enormous holdings. Not only would this sales tax produce upwards of $150 billion a year in federal revenue, but also, it may help eliminate much of the financial gambling that took down the economy in 2007. Considerate it a tax on financial toxic waste.

A Wealth Tax to Improve our Commonwealth

Finland, France, Iceland, Luxembourg, Norway, Spain, Sweden and Switzerland have small net wealth taxes, and England has had a financial transaction tax for three centuries. We should join them. A 1 to 3 percent wealth tax with a million-dollar deduction would only hit the top 1 percent and would provide the nation with from $50 to $150 billion per year in income. Spare change for the super-rich.

The beauty of a wealth tax is that there are no loopholes. Your assets (which include both foreign and domestic) and your liabilities are easily calculated. It’s easier to spot the cheaters. It’s easier to press for information from other countries that may be tempted to launder money for our super-rich. There’s nowhere to run unless the super-rich want to give up their citizenship.

Even Ronald McKinnon, a conservative economist writing in the Wall Street Journal (“The Conservative Case for a Wealth Tax”) is advocating a wealth tax on the super-rich:

In order to have a fairer tax system, we should implement a new federal wealth tax in addition to the federal income tax. Unlike the current income tax, the wealth tax would not rely on how income is defined. Rather, it would require that households list all their domestic and foreign assets on, say, Dec. 31 in the relevant tax year. With a large exemption of $3 million that effectively excludes more than 95% of the population, a moderate flat tax—say 3%, on wealth so defined—could then be imposed.

Combined with the financial transaction tax, we would have more than $200 to $300 billion per year which could rebuild our crumbing infrastructure, provide higher education for our children, eliminate much of the student loan burden, and hire millions of laid-off teachers. Unemployment would fall dramatically and deficit hysteria would vanish into its own hot air.

We can cry about the distribution of income all we want. We can moan and groan about the top 1 percent and how they have captured political power. We can proclaim our membership in the 99 percent for all to hear. But none of that matters much unless we build a mass movement that reclaims our fair share of the fruits of productivity.

The 1 percent didn’t get there just because they were great entrepreneurs or because they were smarter than the rest of us. They got there because they pressed for tax cuts for the super-rich and the deregulation of Wall Street. Those twin policies poured the money into their coffers and stalled our middle-class dead in its tracks. Those policies also crashed the economy and destroyed the jobs of millions of Americans.

A financial transaction tax combined with a wealth tax will bring us closer to the time when the middle-class again was growing year by year. It would put Americans back to work and place our foot right back on Wall Street’s neck – where it needs to be for the good of us all.

But you know it won’t come easy. The super-rich feel entitled to all they can grab. Which means we’ll have to organize like never before and fight like hell. Let’s hope the 99 percent are ready, able and willing.

Les Leopold is the executive director of the Labor Institute and Public Health Institute in New York, and author of The Looting of America: How Wall Street’s Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It (Chelsea Green, 2009).

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see:http://www.alternet.org/story/155025/what_if_the_greedy_rich_paid_their_share_8_things_to_know_about_wealth_and_poverty_in_the_us?akid=8614.123424.KaUfyN&rd=1&t=5

The right-wing’s shellacking

This week’s elections around the country were brought to you by the word “overreach,” specifically conservative overreach.

From: Washington Post

N.B.: what we have not been able to achieve on our own – building class consciousness – gets a big assist from the tea party: Thanks.

By:E.J. Dionne

“This week’s elections around the country were brought to you by the word “overreach,” specifically conservative overreach. Given an opportunity in 2010 to build a long-term majority, Republicans instead pursued extreme and partisan measures. On Tuesday, they reaped angry voter rebellions.

The most important was in Ohio, where voters overwhelmingly defeated Gov. John Kasich’s (R) bill to strip public-employee unions of essential bargaining rights. A year ago, who would have predicted that standing up for the interests of government workers would galvanize and mobilize voters on this scale? Anti- labor conservatives have brought class politics back to life, a major threat to a GOP that has long depended on the ballots of white working-class voters and offered them nothing in return.
Mississippi votes on the “personhood” amendment, which would designate a fertilized egg as a person. 
 
In Maine, voters exercised what that state calls a “people’s veto” to undo a Republican-passed law that would have ended same-day voter registration, which served Maine well for almost four decades.
What’s often lost is that the conservative Republicans elected in 2010 aren’t simply pushing right-wing policies. Where they can, they are also using majorities won in a single election to manipulate future elections — by making it harder for young and minority voters to cast ballots, and by trying to break the political power of unions. The votes in Maine and Ohio were a rebuke to this strategy.In Mississippi, perhaps the most conservative state in the union, voters beat back a referendum to declare a fertilized human egg a person by a margin of roughly 3-to-2. Here was overreach by the right-to-life movement,which tried to get voters to endorse a measure that could have outlawed popular forms of birth control and in vitro fertilization.The war against overreach extended to the immigration issue, too. Russell Pearce became, as the Arizona Republic noted, the first sitting state Senate president in the nation as well as the first Arizona legislator ever to lose a recall election. Pearce, who spearheaded viciously anti-immigrant legislation, was defeated by Jerry Lewis, a conservative with a mild demeanor. Lewis correctly saw his as a victory for restoring “a civil tone to politics.” This was a case of old-fashioned conservatism beating the Tea Party variety.And in Iowa, Democrats held their state Senate majority by winning a special election that had been engineered by Republican Gov. Terry Branstad. Occupy Wall Street, notice that elections matter: A Republican victory over Democrat Liz Mathis would have opened the way for Branstad to push through a cut in corporate income taxes.

Mathis’s defeat could also have allowed conservatives to amend the Iowa Constitution to ban same-sex marriage. Mathis prevailed despite robocalls from an obscure group instructing voters to ask Mathis which gay sex acts she endorsed. (It should be said, as the Des Moines Register reported, that better-known organizations opposed to gay marriage denounced the calls.)

The one potential bright spot for Republicans was not as bright as it was supposed to be. In Virginia, both sides had expected the GOP to take over the state Senate. But at best, the Republicans will achieve a 20-to-20 tie, giving Lt. Gov. Bill Bolling (R) a decisive role. And their chance of getting even to 20 hangs on the recount of an 86-vote margin in one district.

The split means Virginia has not reverted to its earlier status as a Republican bastion. It remains a purple state. Especially significant, Democratic consultant Mo Elleithee observed, were the party’s successes in the Washington suburbs and exurbs and in Hampton Roads, precisely the areas where President Obama needs to do well if he is to carry Virginia next year, as he did in 2008. Democrats also comfortably held the New Jersey Legislature, suggesting the limits of Gov. Chris Christie’s (R) much-touted political magic.

One of the only referendum results the GOP could cheer was a strong vote in Ohio against the health-insurance mandate. While health-reform supporters argued that the ballot question was misleading, the result spoke to the truly terrible job Democrats have done in defending what they enacted. They can’t let the health-care law remain a policy stepchild.

That useful warning aside, Tuesday’s results underscored the power of unions and populist politics, the danger to conservatives of social-issue extremism and the fact that 2010 was no mandate for right-wing policies. They also mean that if Republicans don’t back away from an agenda that makes middle-class, middle-of-the-road Americans deeply uncomfortable — and in some cases angry — they will lose the rather more important fight of 2012.

ejdionne@washpost.com

Emphasis Mine

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Siding With the Billionaires: How the Right Is Waging a Class War Against All But the Wealthiest Americans

the Right’s default position is to side with the billionaires – and to show little or no regard for the fate of anyone else, whether NFL players or sick senior citizens.

From Alternet:

If American football fans end up facing a fall without NFL games, they probably won’t blame George W. Bush and other Republican presidents for packing the federal courts with right-wing judges, but it was two Bush appointees who reversed a District Court ruling that would have ended the lockout of players.

The Appeals Court judgment encouraged the NFL’s hardline billionaire owners to resist making the kinds of compromises that a few less intransigent owners recognize could easily resolve the impasse.

Now, the hardliners simply assume that Republican judges will keep siding with the NFL owners and thus enable them to beat down the players, eventually assuring the billionaire owners a bigger piece of the revenue pie – even if that means losing some or all of the 2011 season.

What many average Americans, especially white guys, don’t seem to understand is that whatever the populist-styled rhetoric of Fox News or Rush Limbaugh, the Right’s default position is to side with the billionaires – and to show little or no regard for the fate of anyone else, whether NFL players or sick senior citizens.

Still, one must give the Right credit for having worked hard refining how to phrase its arguments. Right-wingers even have turned the term “class warfare” against the Left by shouting the phrase in a mocking fashion whenever anyone tries to blunt the “class warfare” that the billionaires have been waging against the middle class and the poor for decades.

On right-wing TV and talk radio across the country, there are tag teams of macho men pretending that ”class warfare” exists only in the fevered imagination of the Left. But billionaire investor Warren Buffett has acknowledged the truth: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

The right-wing propagandists further earn their keep by disparaging science as “elitist.” So, even as the dire predictions from climate-change experts that global warming will generate more extreme weather seem to be coming true, many Americans who have listened to the “climate-change-deniers” for years still reject the scientific warnings.

While no single weather event can be connected to the broader trend of climate change, the warnings about what might happen when the earth’s atmosphere heats up and absorbs more moisture seem to be applicable to the historic flooding in some parts of the world, droughts in others, and the outbreak of particularly violent storms.

Heat and moisture are especially dangerous ingredients for hurricanes and tornadoes.

Ironically, the parts of the United States hardest hit by this severe weather are those represented predominately by Republicans who have been at the forefront of obstructing government efforts to address the global-warming crisis.

Flooding, hurricanes and tornadoes have inflicted horrendous damage on Mississippi, Alabama, Louisiana, Texas, Tennessee, Missouri and Oklahoma – all part of the Republican base.

God’s Punishment?

If televangelist Pat Robertson were a left-winger instead of a right-winger, he might be saying that God is punishing these “red states” for doubting the science of global warming.

However, even as the U.S. news obsesses over the violent weather, mainstream media stars have steered clear of whether global warming might be a factor. It’s as if they know that they’d only be inviting career-damaging attacks from the Right if they did anything to connect the dots.

The Right also is not eager to explain how these catastrophes will require emergency funding and rebuilding assistance from the federal government. After all, you don’t want Republican voters to understand that sometimes “self-reliance” alone doesn’t cut it; sometimes, we all need helpand the government must be part of that assistance.

In the case of the killer tornado that devastated Joplin, Missouri, House Republicans, without a hint of irony, are extracting the funds for disaster relief from green energy programs, which remain a favorite GOP target since many Republicans still insist there is no such thing as global warming.

At both state and national levels, Republican leaders have lined up behind climate-change deniers, with former Minnesota Gov. Tim Pawlenty just the latest GOP presidential hopeful to apologize for his past support of a cap-and-trade system aimed at reducing global-warming gases.

Any serious move toward alternative energies would, of course, be costly to the giant oil companies and their billionaire owners, like David Koch of Koch Industries who has spent millions of dollars funding right-wing organizations, such as the Tea Party. The Right’s media/political operatives know better than to bite the hand that feeds them.

GOP orthodoxy also disdains tax increases on the rich or even elimination of tax breaks for the oil industry. The Republican insistence on low tax rates for the wealthy, in turn, has forced consideration of other policy proposals to achieve savings from services for average Americans.

That is why congressional Republicans have targeted Medicare with a plan that would end the current health program for the elderly and replace it with a scheme that would give subsidies to senior citizens who would then have to sign up for health insurance from private industry, which has proven itself far less efficient in providing health care than the government.

The GOP budget, drafted by House Budget Committee Chairman Paul Ryan of Wisconsin, would impose the Medicare changes on seniors beginning in 10 years.

Most attention on the Ryan plan has focused on estimates that it would cost the average senior citizen more than $6,000 extra per year, but the proposal also has the effect of privatizing Medicare, meaning that the government would make direct “premium support” payments to profit-making insurance companies whose interest is in maximizing profits, not providing the best possible care for old people.

While the Ryan plan would achieve budget “savings” by shifting the burden of health-care costs onto the elderly, Ryan’s budget also would lower tax ratesfor the wealthiest Americans even more, from 35 percent to 25 percent. Partly because of that tax cut, Ryan’s budget would still not be balanced for almost three decades.

Class Warfare

Thus, the battle lines of America’s “class warfare” are getting more sharply drawn. The conflict is now over the Right’s determination to concentrate even more money and power in the hands of the rich by hobbling any government capability to protect the people’s general welfare.

If the Right wins, individual Americans will be left essentially defenseless in the face of unbridled corporate power.

Ryan’s Medicare plan may be just the most striking example because it envisions sick old people trying to pick their way through a thicket of private insurance plans with all their confusing language designed to create excuses for denying coverage. It is not an exaggeration to say that Ryan’s tight-fisted Medicare plan could consign millions of Americans to a premature death.

The Right’s priorities hit home at a town hall meeting held by Rep. Rob Woodall, R-Georgia, when he chastised one of his constituents who worried that Ryan’s plan would leave Americans like her, whose employer doesn’t extend health benefits to retirees, out of luck.

“Hear yourself, ma’am. Hear yourself,” Woodall lectured the woman. “You want the government to take care of you, because your employer decided not to take care of you. My question is, ‘When do I decide I’m going to take care of me?’”

However, another constituent noted that Woodall accepted government-paid-for health insurance for himself.

“You are not obligated to take that if you don’t want to,” the woman said. “Why aren’t you going out on the free market in the state where you’re a resident and buy your own health care? Be an example. …

“Go and get it in a single-subscriber plan, like you want everybody else to have, because you want to end employer-sponsored health plans and government-sponsored health plans. … Decline the government health plan and go to Blue Cross/Blue Shield or whoever, and get one for yourself and see how tough it is.”

Woodall answered that he was taking his government health insurance “because it’s free. It’s because it’s free.”

Self-reliance, it seems, is easier to preach to others than to practice yourself.

Woodall’s explanation recalled the hypocrisy of free-market heroine Ayn Rand, whom Rep. Ryan has cited as his political inspiration. In her influential writings, Rand ranted against social programs that enabled the “parasites” among the middle-class and the poor to sap the strength from the admirable rich, but she secretly accepted the benefits of Medicare after she was diagnosed with lung cancer.

A two-pack-a-day smoker, Rand had denied the medical science about the dangers of cigarettes, much as her acolytes today reject the science of global warming. However, when she developed lung cancer, she connived to have Evva Pryor, an employee of Rand’s law firm, arrange Social Security and Medicare benefits for Ann O’Connor, Ayn Rand using her husband’s last name.

In 100 Voices: An Oral History of Ayn Rand, Scott McConnell, founder of the Ayn Rand Institute’s media department, quoted Pryor as saying: “Doctors cost a lot more money than books earn and she could be totally wiped out.”

So, when push came to shove, even Ayn Rand wasn’t above getting help from the “despised government.” However, her followers, including Rep. Ryan, now want to strip those guaranteed benefits from other Americans of more modest means than Ayn Rand.

It seems it’s okay for average Americans to be wiped out.

Hypocrisy, Hypocrisy

While the Right’s penchant for hypocrisy is well-known (note how many Republicans involved in the impeachment of President Bill Clinton had their own extra-marital affairs), the bigger mystery is why so many average-guy Americans volunteer to fight for the rich in the trenches of the Right’s class warfare.

Clearly, the Right’s propaganda with its endless repetition is very effective, especially given the failure of the American Left to invest significantly in a competing message machine. The Right also has adopted the tone of populism, albeit in support of a well-to-do economic elite.

Yet, perhaps most importantly, the Right has stuck with its battle plan for rallying a significant percentage of middle-class Americans against their own interests.

Four decades ago, President Richard Nixon and his subordinates won elections by demonizing “hippies,” “welfare queens” and the “liberal media.”

Then, in the late 1970s, a tripartite coalition took shape consisting of the Republican Establishment, neoconservatives and the leaders of the Christian Right. Each group had its priorities.

The rich Republicans wanted deep tax cuts and less business regulation; the neocons wanted big increases in military spending and a freer hand to wage wars; and the Christian Right agreed to supply political foot soldiers in exchange for concessions on social issues, such as abortion and gay rights. Ultimately, each part of the coalition got a chunk of what it wanted.

From Ronald Reagan to George W. Bush, the rich got their taxes slashed, saw regulations rolled back and gained a larger share of the nation’s wealth and political power. The neocons got massive military spending and the chance to dispatch U.S. soldiers to kill Israel’s Muslim enemies. The Christian Right got help in restricting abortions and punishing gays.

But what did the American middle-class get?

Over those three decades, the middle-class has stagnated or slipped backward. Labor unions were busted; jobs were shipped overseas; personal debt soared; education grew more expensive, along with medical care. People were working harder and longer – for less. Or they couldn’t find jobs at all.

With today’s Tea Party and the Ryan budget, the Right’s coalition is staying on the offensive. If the House budget were passed in total, tax rates for the rich would be reduced another 10 percentage points; military spending would remain high to please the neocons (who foresee a possible war with Iran); and Planned Parenthood and other pet targets of the Christian Right would be zeroed out.

Yet, with the proposed elimination of traditional Medicare, the Ryan budget has lifted the curtain on what the Right’s “free market” has in mind for most average Americans, who could expect to find their lives not only more brutish but shorter.

The real-life-and-death consequences of the Right’s tax cuts, military spending and culture wars are finally coming into focus. If you’re not rich – and can’t afford to pick up the higher tab on health care – you’re likely to die younger. Or your kids might have to dig into their pockets to help you out.

Less extreme but still troubling, another consequence of the Right’s remarkable success over the past three decades might become apparent on your TV screens this fall.

Thanks to all those right-wing judges packed onto federal appeals courts by Reagan and the two Bushes, American football fans might not have the NFL to watch.

The NFL’s lockout of its players seemed to be ending several weeks ago when a lower-court judge ruled against the billionaire owners, but the NFL’s lawyers confidently filed an appeal to a three-judge panel on the Eighth Circuit, knowing that they would surely get one dominated by Republican judges.

They did. Steven Colloton and Duane Benton, two Republicans appointed by George W. Bush, constituted the majority on the panel and reflexively sided with the NFL’s owners.

The ruling should have surprised no one. After all, the Right’s default position is almost always to side with the billionaires.

[For more on these topics, see Robert Parry’s Secrecy & Privilege and Neck Deep, now available in a two-book set for the discount price of only $19. For details, click here.]

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & ‘Project Truth’ are also available there. Or go to Amazon.com

emphasis mine

see:http://www.alternet.org/story/151138/siding_with_the_billionaires%3A_how_the_right_is_waging_a_class_war_against_all_but_the_wealthiest_americans?akid=7039.123424.rXHQHd&rd=1&t=5