Thursday, September 16, 2010

Tax Cuts And The Wealthiest 2 % In The USA

The debate continues about whether the Bush Tax Cuts should be renewed or allowed to expire.  President Obama proposes that those Americans with taxable incomes of $250,000 or less be given the tax break by renewing the existing tax cuts. The Bush tax cuts would be allowed to expire for those wealthier and wealthiest Americans with taxable income over $250,000. Republicans and some Democrats want the tax cuts renewed for all Americans.

I posted a couple of links on Facebook recently along with my own opinion stating that I thought the wealthiest Americans should pay more taxes. This is one of the responses I received...

@DiAnne - redistributing wealth has not worked in the past and it will not work in the future. Again, the top 10% of income earners, the so called "wealthy" already pay 80% of all taxes received by the federal government. Why can't you let them have their 4% cut???? Why are you so hell bent on having the so called rich shoulder YOUR tax burden??? Why are you not balking at the fact that about 40% (I think it's actually a whopping 46%) of income earners in this country are paying NO TAXES!!! Why do you not get that free enterprise works? Why do you want bigger government? Why do you think the government can solve problems better than private industry? Why, for a change, do you NOT quote left-leaning sites?"

1. Redistributing wealth has worked in the past. See table below.
2. The so called "wealthy" have millions of dollars in off-shore accounts that they pay no taxes on. What is the income level of the top 10% versus the bottom 90%?
3. I pay my taxes. I don't want the rich to pay my taxes. I want those who are less fortunate than me to get a break. Latest statistics indicate that one in five children are living in poverty.
4. Yes. Nearly 46% of Americans pay no income taxes. Many of them are eligible for Earned Income Credits and other tax exemptions or they just don't make enough to begin with. See the information on growing poverty below.
5.Yes. Free enterpise does work...for a few. This is a democratic society here in America, not a capitalistic society. But you wouldn't know it by today's economic and social reality. Trickle down economy doesn't trickle down.
6. I want a government that is big enough and strong enough to regulate business, finance and banking so that this disparity is lessened between the "haves" and the "have nots."
7. If I could find a right-leaning site that had anything to offer in the way of real ideas that would help the majority of Americans, I'd quote it. I will not watch Fox News to get a "fair and balanced " viewpoint.

As Bill Maher said in an interview on Larry King Live the other night..."We live in two different realities. The Conservatives have one reality and the Liberals have another. It does no good to try to talk to the other side. Nothing will get through. You can't reason with unreasonable people." (not an actual quote, but paraphrasing)

In my liberal opinion, I think America is in trouble if we do not find a way to redistribute the wealth in this country. I know it doesn't sound fair...that those who have made the most should pay more taxes...but historically this has been done in the past and the vast majority of Americans thrived. Remember the 50s and 60s?

This graph shows what the tax structure was in the 1950s, 60s...when the wealthiest were taxed up to 90%.

The Poverty Rate Increases
And here is the latest news...
"The poverty rate rose to 14.3 percent during 2009 from 13.2 percent the previous year as household income stayed flat and the number of people without health insurance reached its highest level since such data has been collected, the government announced Thursday."

It's Sad
All of this news is disheartening to me. I worry about the rising numbers of homeless people...children who are going hungry, those who are losing everything because they have lost jobs. I see these people. I know these people. My heart hurts for these people.

I don't know any multi-millionaires...except through news articles. I did write an article here in my blog on the Koch Brothers...those influential money bags who are part of the political puppet show...the ones who pull the strings behind the scenes and flood their interests with money. Here is some of my research on the top 2 % wealthiest people in America...

 Here is an article published today (Sept. 9, 2010) by the Center on Budget and Policy Priorities. I don't believe it is a left-leaning organization.  

Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion

Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows
By Avi Feller and Chad Stone
September 9, 2009

Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.[1]

During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.

The last economic expansion began in November 2001 and ended in December 2007, according to the National Bureau of Economic Research, which means the Piketty-Saez data essentially cover that expansion. The last time such a large share of the income gain during an expansion went to the top 1 percent of households — and such a small share went to the bottom 90 percent of households — was in the 1920s

To read the entire article and view graphs, go here.

Wealth, Income and Taxes is another excellent article I found while "googling" the top 2% of income earners in the USA. It appears in the blog, Who Rules America and was written by UC Santa Cruz Sociology Professor G. William Domhoff in 2005. He recently updated it in August 2010.

Domhoff writes:
"In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. "

"In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America."

Figure 4: Share of wealth held by the Bottom 99%
and Top 1% in the United States, 1922-2007.

"Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions: Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s (Wolff, 2007)."
To read the entire article and other related articles, go here.

Does anyone question the fact that the numbers are much worse three years later?

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