Inequality and What can be Done
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Transcript of Inequality and What can be Done
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Income
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0 10 20 30 40 50 60 70 80 90 1000
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Income Level Versus % of Population-2007
Percent of Population
Inco
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Leve
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Income Growth 1979 to 2007
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Wages Flat
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Wages as % of Economy
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Corporate Profits Risen Exponentially
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Income Inequality Index , by Country
GINI =0, full equality; 1.0, full inequality
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Worldwide Poverty Levels
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70% of all income
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6%of all income
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12% of all income
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6%of all income
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Conclusions on Income• Income Distribution Counter to a Free
Enterprise, Democratic Society• Stifles Domestic Economic Growth -Top 1% Earn the Same as Bottom 55% -2/3 of Population with less than $45,000
Income - Little for New Spending To Spur Growth• The $ Resources to Fix the Economy Are
with the 1% and large Corporations
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Income Share vs. Federal Income Tax Share
Top 0.1% Top 1% Between 1 &5% Between 5% & 10% Between 10% & 25% Between 25% & 50% Bottom 50%0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Income ShareFederal Income Tax Share
Taxes
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Includes payroll taxes
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Regressive Effect of
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Total = federal ,state, and local taxes.
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Total = Federal, state, and local taxes
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Percent of Income Paid for All Taxes
Payroll, Real Estate and Sales Taxes Make Total Tax Rates Similar for Middle Class and Wealthy
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Conclusions on Taxes
• Federal Income Tax Alone Still Somewhat Progressive –But Not Enough
• Regressive(same % for all income levels) payroll, sales, and real estate taxes create similar overall rates for the Middle Class and the Wealthy.
• Need to Address all taxation areas.
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Wealth
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Greater Equality-Economic
• Grow Economy /Restore 17 million Jobs• Distributed Benefit
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How Do You Create 17 Million Jobs?
• Costs About $1.5 Trillion ($1500 billion) A Year• Who Has That? -Government; $200 billion a year would be a feat - Large Corporations; Holding 1.8T, Earning 1.5T
a Year( after taxes) - Wealthiest 1%; Earning $1.0 T a year(after
taxes)
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How to Move the $ to a U.S. Worker
• Tax Breaks for Wealthy Hasn’t Worked• Tax the Wealthy, Govt. Pays the
Employee - Ok for Public Services - But for rest, not efficient; $ In from
private sector, thru government, backout to private sector.
- Most Job Loss in Private Sector
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Getting the $ to a U.S. Worker
The Key: Get Corporations, 1% to Spend on U.S. Job Creating Activities
• Increase Tax Rates but Allow Lower Rates for U.S. Job Investment.
-Credit for demand side- wages, profit sharing, child care, worker education
-Credit for supply side- plant investment, hires
• End Tax Breaks for Facility/Job Outsourcing - Tax Income as Earned , not when “returned “ to U.S. - Limit Foreign Tax Credit; Remove U.S. Sales Income from
Calculation -Offshore Tax Haven Abuse; $100 Billion/Year
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Grow Economy
• American Jobs Act-near term• Change Corporate, Upper End Tax Rates to Spur • U.S. Job Investment• Long Term Infrastructure Work; Derivatives Tax• Change Anti-Competitive Laws and Regulations• Improve Education: public school capability and
funding methods, preschool, community colleges, college loans, grants
• Research and Planning
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With Distributed Benefit
• Increase Upper End Taxes (Income, Capital Gains, Estate)
• Low Rates for U.S Job Creating Investments• Use $ to shore up Safety Nets.• Address Regressive Real Estate and Sales Taxes• Progressive Wealth Tax - Beyond Real Estate• State Income Taxes vs. Sales, Property Taxes
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Distributed Benefit ,con’d
• Positive Union Approach• Change Home Mortgage Formula(earlier
loan principal payoff)• Less reliance on Real Estate Tax for School
Funding• Address Excessive health care charges-price
and method• Others?
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Restoring Equality-Politically
Equality of Voting and Influence- Review of Voter/Voting Impediments ---Registration ---National Holiday ---Extend Early Voting- Limits on Private Campaign Contributions; Override Citizens United Case- Term Limits; Supreme Court, Congress
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Political Equality-con’d
- Post-Election Term Employment Restrictions- Lobbying Transparency- Mass Media Reforms; Free Election Campaign
Air Time, Fairness Doctrine, One Station for Free Public Air Time
- Independent State Commissions for Defining Congressional Districts
- Others?
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Conclusions• Inequality Contributing to Economic
stagnation-Demand• Political Influence Inequality Has kept Status
Quo• No single answer to Job Creation and
Reducing Inequality • Many Initiatives/projects to Do