Calling Working People of All Colors

Bringing white voters who defected to Donald Trump into the fold would make the Democratic Party a formidable force, but not if it means marginalizing the concerns of people of color.

Source:PortSide

Author: Ebony Slaughter-Johnson

Emphasis Mine

A little over 80 years ago, NAACP founder W.E.B. Du Bois wrote “Black Reconstruction in America,” a groundbreaking essay that looked at the racial politics of the post-Civil War years.

The major failure of those years, Du Bois insisted, was that poor whites and poor blacks failed to form an alliance around their mutual economic interests and challenges. Instead, white elites doubled down on their efforts to divide poor people of different races.

“So long as the Southern white laborers could be induced to prefer poverty to equality with the Negro,” Dubois lamented, “a labor movement in the South [was] impossible.” Though similarly exploited by white elites, economically disenfranchised whites and blacks “never came to see their common interest.”

More than eight decades later, we’re still waiting.

In the aftermath of the 2016 presidential election, the resounding explanation for Hillary Clinton’s loss to Donald Trump has been that Democrats failed to respond to the economic needs of the white working class. As a result, this story goes, the white working class turned towards Donald Trump and contributed significantly to his victory.

For some, then, the diagnosis for the party’s malaise is simple: Bring the white working class back into the fold.

If you are going to mention groups in America, you had better mention all of them. If you don’t, those left out will notice and feel excluded,” Columbia University professor Mark Lilla wrote. He sharply criticized Hillary Clinton for “calling out explicitly to” blacks and Latinos while supposedly neglecting the white working class.

Bringing those white voters into the fold would make the Democratic Party a formidable force, but not if it means marginalizing the concerns of people of color. That would be an unmitigated disaster.

The best way for progressives to realign themselves with the white working class isn’t to reverse this progress. It’s to argue forcefully that the economic concerns of the white working class and people of color are more alike than different.

For instance, working white people understandably complain of lower wages and lost jobs. Yet these economic challenges are part and parcel to those confronting communities of color.

The unemployment rate for black Americans is twice that for the white community across education levels. Similarly, the income gap between black and white households grew to $25,000 as of 2014, a statistic due in no small part to the same wage stagnation, deindustrialization, and de-unionization plaguing many Rust Belt whites.

Trends in wealth have mirrored those in income. Where the Great Recession led to a 16 percent loss in wealth for the average white family, it led to a 53 percent loss for the average black family. As of 2014, around  a quarter of black and Latino Americans lived in poverty, compared to 10 percent of whites.

The racism that’s worsened conditions for many Americans of color needs to be addressed head-on. But many of the same populist economic policies that would lift them up would also help struggling whites.

Instead of erasing race from the equation, working people and their progressive advocates should take their cues from Du Bois and get to work building what he called a unified “proletariat” of all colors.

At this rate, we don’t have another 80 years.

Ebony Slaughter-Johnson is a research assistant with the Criminalization of Poverty project at the Institute for Policy Studies. Distributed by OtherWords.org.

 

See: http://portside.org/2016-12-24/calling-working-people-all-colors

Tax Cuts for the Wealthy DO NOT Create Jobs

Source: DailyKos

Author: Jocava

Emphasis Mine

After 30 years of re-engineering our nation’s economy and tax code to deliver huge benefits, free of charge, to the wealthy, the most massive transfer of wealth in the history of the world —a transfer of wealth that has led to now catastrophically failed wealth disparities between the wealthiest and the poorest—, we have not seen the wildly prolific job-creation that was promised. Indeed, we have seen our manufacturing base stripped away piece by piece and our middle class society systematically eroded.

Now, after 10 years of massive tax breaks for the wealthiest people in the history of humanity, we have seen a further concentration of wealth and a further erosion of the open market for employment and innovation. The 400 wealthiest people in the United States now control more wealth than 155 million people at the other end of the socio-economic spectrum combined. The tax cuts that were supposed to be given to the “supply side” were never given to the supply side at all, only to those that seek to own it.

To distill the complicated economics down to simple terms: Why should the rich “create jobs”, why should they put money into wages in order to build businesses to make profits, when it’s being handed to them in unprecedented amounts, for free? That’s the real problem. When the government takes money from everyone, then hands it out to the wealthiest among us, it has the direct effect of disincentivizing investment by those individuals and interests in the creation of new businesses and new jobs.

It is economic incentive that drives enterprise, not the supposed nobility of spirit of the wealthy. That idea is aristocracy: that the ruling class is there because they deserve to be, because they are uniquely noble, because they have arete —excellence and a commitment to justice and humane values, to the better interests of society at large. Our nation is founded on the self-evident truth that medieval aristocracy is a lie, and that powerful elites do not tend to give their power and privilege back to the people.

It makes no sense to be fostering a new aristocracy, to be transferring literally trillions of dollars in wealth, as a matter of national policy, to the wealthiest people in our society. There is no economic reason for doing so. There is nothing about that process which upholds or defends democracy. Much to the contrary, the massive and unprecedented transfer of wealth from ordinary, working Americans to the already wealthy —which began with Ronald Reagan and accelerated to warp speed with George W. Bush’s 2001 and 2003 tax cuts—, has crippled our economy and removed any incentive major financial interests have to invest in widespread job creation.

If you believe a vibrant middle class is essential to fostering generalized citizen participation and real elective democracy, then the collapse of that middle class, the decline in household wages, the rapid escalation in bankruptcies and home foreclosures, should worry you. Even if you are a billionaire, it should worry you, because the erosion of our middle class, the gutting of funds from our educational system, the prioritization of billionaires and multinational corporations, is eroding our democracy itself.

When Vice President Joe Biden left the Senate to join the Obama administration, he was the only member of the United States Senate who was not a millionaire. He had not used his office to enrich himself or his family, and he had not played the game of Washington insider. He was not a celebrity and he did not view politics as a battle for cold, hard cash. He made policy based on how it would affect ordinary citizens, local communities, the real human freedom of people he knows and understands.

As the Senate became the world’s most powerful millionaire’s club, it became harder and harder for ordinary people to break into politics. The power of the two-party system had made it risky for anyone not to support the one of the two parties most friendly to their views, because even the slightest erosion of support for one of the two parties is now translated, through furious and misleading reporting of public opinion poll numbers as a “gain” for the other party.

As the concentration of wealth in the hands of the few has accelerated, and the concentration of political power in the hands of the wealthy has followed along, the outright lie that tax cuts for the wealthy are the best, indeed the only, way to create jobs continues to have widespread support. Though real people living in the real world can see with their own eyes that fundamental pillars of our democracy are being eroded, or even eliminated, while parents across the country know what it would mean for the House of Representatives to strip funding for Head Start, for public education and for college financial aid, the transfer of wealth goes ahead, and the job creation boom to which innovative, hard-working, democratic Americans are entitled, continues to stall.

There should be an indefinite, blanket moratorium on wasteful wealth spending.

Since we know that spending trillions of dollars on tax cuts for the wealthy is counterproductive, does not create jobs and is undermining our democracy, every independent voter, every Democratic and every Republican voter, should demand of every elected official that they cease to prioritize the giveaway of taxpayer money to those who have no use for it and will not use it to invest in rebuilding the middle class.

Tax cuts for the wealthy do not create jobs. Tax cuts for the wealthy are not a constructive way to build democracy. Tax cuts for the wealthy are not a sound investment for the already embattled middle class. Every proposed cut to social spending, every proposed tax break for millionaires and billionaires, is part of the same process of eroding our middle class and shoring up the long-term power interest of the already powerful.

It should not be the economic policy of a middle class democratic republic to prioritize the protection of millionaires and billionaires against economic hardship, when the economic hardship of the moment was created specifically and through many years of coordinated effort, by the mismanagement and bad practice of that very “investor class” that seeks to give the real power in our society to banks, hedge funds and offshore interests.

Whether by incompetence, ignorance or malice, the financial industry was hijacked by a logic of might makes right: anything that can be done to expand wealth, any “instrument” that can be devised that will make the digital, ethereal wealth of our times appear to increase, was to be cultivated, protected and propagated, regardless of the risk to the wider society or to the health of our people and our democracy.

The financial collapse of 2007 and 2008 was not brought about by working people’s mortgages; it was brought about by major financial interests that had agreed, implicitly and explicitly, it was no longer of any importance whether major national investment strategies represented real wealth or spurious wealth claims; what mattered was that those at the top could benefit from implementing the strategies.

That is what was done with our trillions of dollars in wealth subsidies: while the American people were told that tax breaks for the wealthiest of the wealthy would lead to widespread job creation, the money was devoted to creating entirely new markets where only money would be needed to make more money. Gone were the heady old days when earning millions was supposed to represent investment in an actual enterprise doing actual business, building a better society.

There should be an indefinite, blanket moratorium on wasteful wealth spending, because the work of our age needs to be the reinvention of our economy, the reversal of this egregious and undemocratic transfer of wealth from the tens of millios to the 400, and the restoration the principle that if it’s good for America, it’s because it’s good for building a vibrant, free and educated middle class that actually has the power to govern its own future and to steer the ship of state.

SOME DATA: The top 20% of the socio-economic pyramid in our country control well more than 80% of all the wealth. Just the top 1% control 40% of all financial investment assets.

In 2001, George W. Bush inherited a 10-year budget surplus of $1.7 trillion. His 2001 and 2003 tax cuts plunged the government into deficit spending, immediately. By 2002, the surplus was already erased, after just one year of the long-term tax cut plan.

By 2009, when Bush left office, he had doubled Defense spending, pledged over $1 trillion to banks, and average household incomes had FALLEN by more than $2,000 per year.

The result of these policies was: 25% of all American children living in poverty, near 10% unemployment (officially), as high as 25% among young people and well over 30% among some minority communities.

In 2008 and 2009, the nation saw record bankruptcies, record rates of home foreclosures, and despite massive investment in recovery efforts, in 2009 and 2010 job recovery has been slow to non-existent. The reason: even as banks and wealthy investors began to see their economic engine revving up again, they saw no economic incentive at all to invest in job creation.

The wrong kind of tax policy was giving them cash for nothing, and incentivizing them to invest it in money-for-the-wealthy financial schemes that don’t support small business, manufacturing, entrepreneurship or job-creation.

Originally posted to jocava on Tue Mar 08, 2011 at 06:28 AM PST.

Also republished by Income Inequality Kos, Daily Kos Classics, and Community Spotlight.

The Rise of the Non-Working Rich

Source: RSN

Author Robert Reich

In a new Pew poll, more than three quarters of self-described conservatives believe “poor people have it easy because they can get government benefits without doing anything.”

In reality, most of America’s poor work hard, often in two or more jobs.

The real non-workers are the wealthy who inherit their fortunes. And their ranks are growing.

In fact, we’re on the cusp of the largest inter-generational wealth transfer in history.

The wealth is coming from those who over the last three decades earned huge amounts on Wall Street, in corporate boardrooms, or as high-tech entrepreneurs.

It’s going to their children, who did nothing except be born into the right family.

The “self-made” man or woman, the symbol of American meritocracy, is disappearing. Six of today’s ten wealthiest Americans are heirs to prominent fortunes. Just six Walmart heirs have more wealth than the bottom 42 percent of Americans combined (up from 30 percent in 2007).

The U.S. Trust bank just released a poll of Americans with more than $3 million of investable assets.

Nearly three-quarters of those over age 69, and 61 per cent of boomers (between the ages of 50 and 68), were the first in their generation to accumulate significant wealth.

But the bank found inherited wealth far more common among rich millennials under age 35.

This is the dynastic form of wealth French economist Thomas Piketty warns about. It’s been the major source of wealth in Europe for centuries. It’s about to become the major source in America – unless, that is, we do something about it.

As income from work has become more concentrated in America, the super rich have invested in businesses, real estate, art, and other assets. The income from these assets is now concentrating even faster than income from work.

In 1979, the richest 1 percent of households accounted for 17 percent of business income. By 2007 they were getting 43 percent. They were also taking in 75 percent of capital gains. Today, with the stock market significantly higher than where it was before the crash, the top is raking even more from their investments.

Both political parties have encouraged this great wealth transfer, as beneficiaries provide a growing share of campaign contributions.

But Republicans have been even more ardent than Democrats.

For example, family trusts used to be limited to about 90 years. Legal changes implemented under Ronald Reagan extended them in perpetuity. So-called “dynasty trusts” now allow super-rich families to pass on to their heirs money and property largely free from taxes, and to do so for generations.

George W. Bush’s biggest tax breaks helped high earners but they provided even more help to people living off accumulated wealth. While the top tax rate on income from work dropped from 39.6% to 35 percent, the top rate on dividends went from 39.6% (taxed as ordinary income) to 15 percent, and the estate tax was completely eliminated. (Conservatives called it the “death tax” even though it only applied to the richest two-tenths of one percent.)

Barack Obama rolled back some of these cuts, but many remain.

Before George W. Bush, the estate tax kicked in at $2 million of assets per couple, and then applied a 55 percent rate. Now it kicks in at $10 million per couple, with a 40 percent rate.

House Republicans want to go even further than Bush did.

Rep. Paul Ryan’s “road map,” which continues to be the bible of Republican economic policy, eliminates all taxes on interest, dividends, capital gains, and estates.

Yet the specter of an entire generation who do nothing for their money other than speed-dial their wealth management advisors isn’t particularly attractive.

It’s also dangerous to our democracy, as dynastic wealth inevitably accumulates political influence.

What to do?  First,restore the estate tax in full.

Second, eliminate the “stepped-up-basis on death” rule. This obscure tax provision allows heirs to avoid paying capital gains taxes on the increased value of assets accumulated during the life of the deceased. Such untaxed gains account for more than half of the value of estates worth more than $100 million, according to the Center on Budget and Policy Priorities.

Third, institute a wealth tax. We already have an annual wealth tax on homes, the major asset of the middle class. It’s called the property tax. Why not a small annual tax on the value of stocks and bonds, the major assets of the wealthy?

We don’t have to sit by and watch our meritocracy be replaced by a permanent aristocracy, and our democracy be undermined by dynastic wealth. We can and must take action — before it’s too late.

 

Emphasis Mine

See:http://readersupportednews.org/opinion2/274-41/24802-the-rise-of-the-non-working-rich

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).

Emphasis Mine

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