Showing posts tagged income inequality.
x

Under the Mountain Bunker

Leave me a message   Location: Colorado. More info here.



» Website

twitter.com/charyl:

    The growing income gap, stalled economic growth, and financial deregulation →

    “The idea that people make the same or less today than they made 40 years ago is a stunning historical fact.” — Author Jeff Madrick

    NPR: As income gap balloons, is it holding back growth?

    “This inequality is destabilizing and undermines the ability of the economy to grow sustainably and efficiently,” [Fed governor Sarah Bloom Raskin] said. Income inequality, she continued, is “anathema to the social progress that is part and parcel of such growth.”

    The income gap in the United States has ballooned: It’s wider than any time since 1928, in the days before the stock market crash triggered the Great Depression.

    […] “In the 1970s, there was an assault on government oversight and regulation,” Madrick tells Raz. “And eventually, the financial community stopped playing by the rules. There was an economic theory that kept justifying what they were doing. And the American public was not fully aware of what was going on.”

    The traditional argument for deregulation states that those policies make America richer, and that a rising tide lifts all boats.

    But Madrick says that for the typical American worker, the wage tide has gone out since 1969.

    “The typical male worker makes less today, discounted for inflation, than the typical median worker made in 1969,” says Madrick. “The idea that people make the same or less today than they made 40 years ago is a stunning historical fact.”

    […] “[Bank failures] peak up in crisis years. They peak in the 1920s,” [David Moss, a professor of economics at Harvard Business School] tells Raz. “But then most striking, after 1933, when we saw the introduction of federal banking and financial regulation, these banking crises disappear almost completely. And then it continues very, very low until the 1980s, then they pick back up again.”

    Moss found it striking that banking failures go down after financial regulation and start rising after the introduction of deregulation.

    Then, one of Moss’ colleagues showed him a chart of income inequality over the same period. Moss took that curve and plotted it on the same page as his bank failure curve.

    “And lo and behold, it was a striking, striking connection,” Moss says.

    As bank failures went up in the 1920s, so did income inequality. As inequality came down in the 1930s, bank failures stayed down. They stayed down together until the advent of deregulation in the 1980s.

    For Moss, this coincidence raises more questions than it provides answers. He isn’t sure what exactly the correlation between income inequality and financial failure means.

    Read the rest…

    So there’s an historical correlation that financial regulation might be one of the best things that could happen for creating economic growth and closing the income gap? Maybe that’s because government regulation and oversight actually keeps financial institutions more honest and accountable than fictional concepts, such as some “invisible hand” guiding everything or Reagan’s “trickle down” fallacy. Maybe it also helps ensure that individuals in financial institutions won’t gamble away everyone else’s money on things like sub-prime mortgage loans while they walk away with their own fortunes intact.

    And I’m not even bringing up the 10.5 years of tax breaks for the job creators wealthy here, or that the wealthy compounded their fortunes during a time of economic loss for everyone else. They work harder than us, right?

    It’s almost TOO SIMPLE. That must be why the Tea Party base sides with millionaires like the Koch brothers to protest “big” government and regulation and expiring Bush’s tax cuts for the rich. Because they’re morans.

    The gap in income between the wealthiest Americans and all others has grown strikingly in recent decades, the CBO data show. In 1979, when the data begin, the average after-tax incomes of the top 1 percent of households were 7.9 times higher than those of the middle fifth of households. By 2007, top incomes were 23.9 times higher than those of the middle fifth — a more than tripling of the income gap.
    — 3 years ago
    #politics  #news  #unemployment  #income redistribution  #class war  #war on the middle class  #GOP  #Republicans  #tea party  #NPR  #financial regulation  #Bush tax cuts  #tax cuts for the rich  #deregulation  #federal government  #income inequality  #big government  #income gap  #economic growth  #bank failures 
    …
Cause of the still terrible job market? The wealthy and the “great consumer bust”
Joshua Holland at Alternet discusses the fallacy of the wealthy as ‘job creators’ and the fact that without working- and middle-class consumers, there isn’t a need for more jobs. And without good jobs, Americans have no money to spend:

Consumer demand accounts for around 70 percent of our economic output. And with so much wealth having been redistributed upward through a 40-year class-war from above, American consumers are too tapped out to spend as they once did. This remains the core issue in this sluggish, largely jobless recovery. The wealthy, in their voracious appetite for a bigger piece of the national pie, are the real job-killers in this economic climate.
Don’t take my word for it. The Wall Street Journal reported this week that “the main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists” the paper surveyed. That jibes with what business owners themselves are saying. Last week, the National Federation of Independent Businesses released a survey of small businessmen and women that found widespread “pessimism about future business conditions and expected real sales gains.”
New York Times reporter David Leonhardt wrote this week that “We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.”

Related:
The growing income gap, stalled economic growth, and financial deregulation
The American Dream: we’ve gone from ‘prosperity for all’ to ‘the rich takes all’
Middle America since 1979: doing more work for less money, even as corporate profits rise
Tax breaks to the wealthy will never create jobs
19 Facts About The Deindustrialization Of America


    Cause of the still terrible job market? The wealthy and the “great consumer bust”

    Joshua Holland at Alternet discusses the fallacy of the wealthy as ‘job creators’ and the fact that without working- and middle-class consumers, there isn’t a need for more jobs. And without good jobs, Americans have no money to spend:

    Consumer demand accounts for around 70 percent of our economic output. And with so much wealth having been redistributed upward through a 40-year class-war from above, American consumers are too tapped out to spend as they once did. This remains the core issue in this sluggish, largely jobless recovery. The wealthy, in their voracious appetite for a bigger piece of the national pie, are the real job-killers in this economic climate.

    Don’t take my word for it. The Wall Street Journal reported this week that “the main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists” the paper surveyed. That jibes with what business owners themselves are saying. Last week, the National Federation of Independent Businesses released a survey of small businessmen and women that found widespread “pessimism about future business conditions and expected real sales gains.”

    New York Times reporter David Leonhardt wrote this week that “We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.”

    Related:

    — 3 years ago with 2 notes
    #news  #politics  #class war  #income redistribution  #war on the middle class  #consumer demand  #consumers  #GOP  #income inequality  #job creators  #middle-class  #no jobs  #Republicans  #tax cuts for the wealthy  #tea party  #wealthy  #working class 
    What doesn’t the average teaparty voter understand about income inequality that’s been growing since the ’70s? →

    The working- and middle-class teahadists continue to scream for tax cuts for the wealthy, in open defiance of their own self-interests. I don’t get it.

    John Cole lays out the case that luxury goods (like $9,000 Chanel sequined tweed coats) are flying off luxury store shelves and mebbe it’s time the rich folks contribute a little more tax revenue to our sinking ship called the USA:

    Via Economix: …the nation’s income distribution may be quite lopsided, but its wealth distribution is even more so.

    The top 1 percent of earners receive about a fifth of all American income; on the other hand, the top 1 percent of Americans by net worth hold about a third of American wealth. (Note that the top income earners are not necessarily the same people as the top net-worth Americans — after all, lots of high-net-worth people don’t work or have much else in the way of sources of new income.) Wealth-related inequality has also been relatively stable over the last few decades, whereas income-related inequality has been growing since the ’70s.

    Cole ends with this:

    Our Galtian overlords have the most money they ever have, their taxes are at the lowest levels they have in many decades, and they have plenty of money to blow on luxury items. Why? BECAUSE THEY HAVE ALL THE FUCKING MONEY. It’s no coincidence that luxury items are flying off the shelves while concomitantly, the middle class is slowing down their spending on food, furniture, etc. In fact, this is precisely the point many dirty hippies have been trying to make- we are never going to have an economic recovery until some people other than the Kochs and Warren Buffet have money to spend. And with unemployment at astronomical levels and with the official government policy to make things worse with austerity and then hope a magical unicorn comes sliding down a rainbow showering jobs on the middle class, it is going to stay this way. Fer fuck’s sake.

    Agreed. WTF, teaparty?

    Related:

    Matthew Yglesias: Sales of luxury goods are sharply accelerating. …the key sentence in the piece is this one (emphasis added): “Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming.”

    — 3 years ago
    #news  #politics  #class war  #income redistribution  #war on the middle class  #1% vs. 99%  #Bush tax cuts  #growing gap  #income inequality  #luxury goods  #rich people buy really expensive things!  #tax cuts for the wealthy  #the poor  #the rest of us  #the rich 
    US Has Fourth-Highest Income Inequality Rate in the World →

    A recent report issued by Paris’ Organisation for Economic Co-operation and Development analyzes the countries around the world with the highest income inequality rate, per capita. And guess where the United States sits? At number four — right after Chile, Mexico and Turkey. Given our country’s unemployment rate — noted today to have jumped unexpectedly last week —compared to our proportion of billionaires (of the richest people on the planet, the US claims four of the top ten), this doesn’t come as a huge surprise. But it does underscore what happens to a country in which the wealthy live on the backs of the poor —

    (Source: sarahlee310)

    — 2 years ago with 9 notes
    #income inequality  #Organisation for Economic Co-operation and Development 
    Top 1% of taxpayers receive more income than entire bottom half combined
From the Center on Budget and Policy Priorities:

Tax policy should lean against the rising tide of income inequality, not exacerbate it. During the first three decades after World War II, economic growth was  robust and widely shared: economy-wide productivity improvements were  accompanied by significant increases in the living standards of most  Americans. In recent decades, by contrast, the benefits of economic  growth have not been widely shared. CBO data show that between  1979 and 2007, the average after-tax income of the top 1 percent of  Americans grew by 281 percent, after adjusting for inflation, compared  to just 25 percent for the middle 20 percent of Americans, and ­­16  percent for the poorest fifth of the population.[13]
The tax cuts enacted in 2001 and  2003 provided the largest benefit to the highest-income households and  widened these yawning income disparities. Under these tax cuts,  households with incomes over $1 million stand to receive an average tax  cut of $130,000 in 2012, according to the Tax Policy Center, equivalent  to an increase of 6.3 percent in their after-tax income. Meanwhile,  households in the middle of the income spectrum will receive tax cuts  that equal 2.3 percent of their income. Households in the bottom  quintile will receive an average increase in income of less than 1  percent. [14] (See Figure 3.)

Summary: after tax incomes from Bush’s tax cuts:
Households > $1 million: increase of 6.3%
Households in middle income: increase of 2.3%
Households in bottom quintile: increase of < 1%

The GOP has been actively engaged in bottom-to-top income  redistribution. And because of God, guns, and gays, the fundamentalist  teabaggers will vote for it — despite their own precarious financial  situation.
Want it to stop? Vote next time.
via: @allisonkilkenny

    Top 1% of taxpayers receive more income than entire bottom half combined

    From the Center on Budget and Policy Priorities:

    Tax policy should lean against the rising tide of income inequality, not exacerbate it. During the first three decades after World War II, economic growth was robust and widely shared: economy-wide productivity improvements were accompanied by significant increases in the living standards of most Americans. In recent decades, by contrast, the benefits of economic growth have not been widely shared. CBO data show that between 1979 and 2007, the average after-tax income of the top 1 percent of Americans grew by 281 percent, after adjusting for inflation, compared to just 25 percent for the middle 20 percent of Americans, and ­­16 percent for the poorest fifth of the population.[13]

    The tax cuts enacted in 2001 and 2003 provided the largest benefit to the highest-income households and widened these yawning income disparities. Under these tax cuts, households with incomes over $1 million stand to receive an average tax cut of $130,000 in 2012, according to the Tax Policy Center, equivalent to an increase of 6.3 percent in their after-tax income. Meanwhile, households in the middle of the income spectrum will receive tax cuts that equal 2.3 percent of their income. Households in the bottom quintile will receive an average increase in income of less than 1 percent. [14] (See Figure 3.)

    Summary: after tax incomes from Bush’s tax cuts:

    • Households > $1 million: increase of 6.3%
    • Households in middle income: increase of 2.3%
    • Households in bottom quintile: increase of < 1%

    http://www.cbpp.org/images/cms//9-27-11tax-f3.jpg

    The GOP has been actively engaged in bottom-to-top income redistribution. And because of God, guns, and gays, the fundamentalist teabaggers will vote for it — despite their own precarious financial situation.

    Want it to stop? Vote next time.

    via: @allisonkilkenny

    — 2 years ago with 116 notes
    #politics  #class war  #income redistribution  #unemployment  #vote!  #war on the middle class  #botton-to-top income redistribution  #Bush's tax cuts  #Center on Budget and Policy Priorities  #GOP  #income inequality  #Republicans  #spending cuts for the rest of us  #tax cuts for the wealthy  #tax policy  #tea party 
    #OccupyWallStreet: the top 1% take in more of the nation’s income than at any time since the 1920s →

    I threw 2 posts together from inothernews, because they really belong together:


    TOP FIVE FACTS ABOUT THE ONE PERCENT from Think Progress:

    1. The top 1 percent of Americans owns 40 percent of the nation’s wealth

    2. The top 1 percent of Americans take home 24 percent of national income

    3. The top 1 percent of Americans own half of the country’s stocks, bonds, and mutual funds

    4. The top 1 percent of Americans have only 5 percent of the nation’s personal debt

    5. The top 1 percent are taking in more of the nation’s income than at any other time since the 1920s

    More at ThinkProgress (via: inothernews)

    And what’s a typical conservative / 1% response? It’s either: If ‘the poor’ did what ‘the rich’ do, they’d be rich too! (Only Teapartyers buy that nonsense.)

    Or if they wanted to be honest with us, the response would be:

    image: inothernews

    — 2 years ago with 2 notes
    #politics  #class war  #income redistribution  #unemployment  #war on the middle class  #bottom to top  #bush's tax cuts for the wealthy  #five facts about the 1%  #GOP  #greed  #income inequality  #occupywallstreet  #Republicans  #spending cuts for the rest of us  #tax cuts for the wealthy  #tea party  #Think Progress 
    Things I have no problem with: new taxes on the wealthiest Americans →

    Seeking to consolidate party support for President Obama’s jobs bill, Senate Democrats are considering a proposal to impose a five percent surtax on millionaires to pay for the legislation, according to two party aides. As currently written, Obama wants the joint Super Committee to increase its deficit reduction target by enough to pay for the whole jobs bill. That way its cost could be offset by spending cuts and revenue measures and other reforms that have bipartisan support. But failing that, Obama’s bill would trigger a series of new taxes on wealthy Americans, including oil and gas companies, hedge fund managers and others.Dems Float Surtax On Millionaires To Pay For Jobs Bill

    Eric Cantor said yesterday he won’t even bring the jobs bill to the floor for a vote.

    Over the past 3-4 decades, the one percent has not only benefited enormously through the American tax system, but especially during the Bush years. And in the past 10+ years, the wealthiest have created no jobs to speak of, even though they are taking in more of the nation’s income than at any time since the 1920s. Believe it or not, our income inequality is currently worse than Ethiopia’s (!!), which hurts not only our overall economy, but every person who isn’t wealthy. So I have absolutely no problem with new taxes on the one percent.

    “There is nobody in this country who got rich on his own. Nobody.”

    — 2 years ago
    #1% vs. 99%  #5% surtax on millionaires  #Elizabeth Warren  #GOP  #President Obama  #Republicans  #There is nobody in this country who got rich on his own. Nobody.  #class war  #income inequality  #income redistribution  #new taxes on the wealthy  #news  #obama's jobs bill  #pay for the jobs bill  #politics  #tea party |  #unemployment  #war on the middle class  #occupywallstreet 
    How did the rising tide capsize 99percent of the boats in America? →

    MaddowBlog: This is the graph Ezra used last night to explain why the Occupy Wall Street/99% protests aren’t simply a case of sour grapes and bitterness.

    You have to ask yourself — how is it that the one percent is doing so great? They haven’t been playing more by the rules. Or getting more educated. And — here’s the really important part if you want to understand why the other 99 percent are out protesting and why they’re calling their movement Occupy Wall Street — how come they haven’t brought anyone else along with them.

    Look at the relationship between the one percent — they’re the red line here. And everyone else — they’re the blue line.  If you look at what everyone was making in 1945, there was a while when we were all pretty near each other — there was a while when we rose and we fell together. And then we didn’t. Starting in about the 80s that just stopped. Read more…

    DailyKos: Kevin Drum keeps the focus of Occupy Wall Street front and center with this simple graph.

    Just keep reminding yourself: a mere three years after the financial industry nearly destroyed the planet, Wall Street is bigger and more profitable than ever while a tenth of the rest of us remain mired in unemployment. Even after nearly destroying the planet, virtually nothing has changed. That’s the outrage, not a few folks with funny costumes or wacky slogans. Always keep in mind whose side you’re on.

    Wall St rebound

    THIS ‘GREAT INCOME SHIFT’ means that there has been a bottom-to-top income redistribution going on since 1979 with our current tax laws. The 99 percent pay proportionally more of their income to taxes than the wealthiest 1 percent. Meanwhile the GOP and their benefactors want to convince us that the wealthiest should pay even LESS of their income to taxes than they do now. The Republican party’s plan for a reduction in revenue is to cut programs and services used by the 99 percent. You may wish to vote accordingly in 2012.

    — 2 years ago with 6 notes
    #class war  #income redistribution  #politics  #unemployment  #vote!  #war on the middle class  #99percent  #capsize the boats  #financial sector profits  #income inequality  #job creators  #jobs  #NOT sour grapes and bitterness  #occupywallstreet  #rising tide  #spending cuts for the rest of us  #tax cuts for the wealthy  #wall street bigger more profitable than ever 
    Think Progress:

This evening, House Majority Leader  Eric Cantor (R-VA) will give a speech at the University of  Pennsylvania’s Wharton School of Business about how to address income inequality, likely trying to capitalize on the 99 Percent Movement he once derided as unruly “mobs.”

Scratch that. Anyway…

Strong unions have traditionally been the  free-market solution to income inequality, allowing people to get higher  salaries without government intervention. Unionization has allowed  middle class and working-class Americans to have the ability to bargain  for stronger wages and benefits and a larger share of national income.  Highly-unionized countries tend to have far less income inequality.
Sweden, where 85-90 percent of the population is unionized, is both a prosperous country and one of the most economically equal societies — and that’s in a nation that doesn’t even have a national minimum wage.

Read it all…
Consider this:
Click for larger image:
What’s actually happened with working and middle class wages along  with the decline in unions? CEO pay has skyrocketed 300% since 1990,  corporate profits have doubled. Average “production worker” pay has  increased 4%. The minimum wage has dropped.
Since 1990, your pay and mine increased only 4% (if we’re lucky enough to have jobs), while the 1 percent have enjoyed a massive pay increase of 300%!   I suppose that’s justified if the 1 percent contributed and produced  and worked 296% more than the rest of us — but my guess is that they  didn’t.
More tax cuts for the rich and spending cuts for the rest of us? #OWS
How the 1 percent profited from the decline of unions — and income inequality SKYROCKETED

    Think Progress:

    This evening, House Majority Leader Eric Cantor (R-VA) will give a speech at the University of Pennsylvania’s Wharton School of Business about how to address income inequality, likely trying to capitalize on the 99 Percent Movement he once derided as unruly “mobs.”

    Scratch that. Anyway…

    Strong unions have traditionally been the free-market solution to income inequality, allowing people to get higher salaries without government intervention. Unionization has allowed middle class and working-class Americans to have the ability to bargain for stronger wages and benefits and a larger share of national income. Highly-unionized countries tend to have far less income inequality.

    Sweden, where 85-90 percent of the population is unionized, is both a prosperous country and one of the most economically equal societies — and that’s in a nation that doesn’t even have a national minimum wage.

    Read it all…

    Consider this:

    Click for larger image:

    What’s actually happened with working and middle class wages along with the decline in unions? CEO pay has skyrocketed 300% since 1990, corporate profits have doubled. Average “production worker” pay has increased 4%. The minimum wage has dropped.

    Since 1990, your pay and mine increased only 4% (if we’re lucky enough to have jobs), while the 1 percent have enjoyed a massive pay increase of 300%!  I suppose that’s justified if the 1 percent contributed and produced and worked 296% more than the rest of us — but my guess is that they didn’t.

    More tax cuts for the rich and spending cuts for the rest of us? #OWS

    How the 1 percent profited from the decline of unions — and income inequality SKYROCKETED

    — 2 years ago with 8 notes
    #politics  #99% vs. 1%  #99percent  #graphs  #income inequality  #middle class income shrinks  #occupywallstreet  #ows  #spending cuts for the rest of us  #tax cuts for the wealthy  #top 1 percent income explodes  #union membership decrease  #unions  #class war  #income redistribution  #politics  #unemployment  #war on the middle class 
    &#8230;
Let’s talk about how our lost income has trickled UP the ladder in the past 30 years
And let’s discuss it loudly, out in the open — despite where Mittens would prefer people talk — and especially since he’d like to double Bush’s tax cuts for the richest of the rich.

What Romney Doesn’t Want You Talking About — Except In ‘Quiet Rooms’

Too bad for Mitt Romney. Turns out  income inequality — that thing he claims has no place in our political  debate, or anywhere outside of “quiet rooms” — will be a central theme of President Obama’s re-election message. We know this because one of his top economic advisers essentially claimed as much in a public address at a top DC think tank on Thursday morning.

And the data he brought to the table suggests Democrats will have an easy time making their case

“[W]e can’t go back to the type of  policies that exacerbated the rise in inequality and threatened economic  mobility in the first place if we want an economy that builds the  middle class,” said Alan Krueger, chairman of President Obama’s Council  of Economic Advisers. [&#8230;]

Thirty years ago, the U.S. underwent a  shift — from an economy that grew in a way that lifted all segments of  society, to an economy that gives heavy preference to the wealthy.  That’s the broad story of the last three decades, but as Krueger pointed  out, policy has a role to play. The trend abated temporarily in the  1990s, when the country returned to an era of fairly uniform income  growth distribution. That all changed for most people, and their lost income has instead trickled up the ladder. Read more…

Does looking at that graph above inspire “envy” in you — or anger? I don’t think envy means what Romney thinks it means.
Related: 
Mitt Romney’s “politics of envy” (i.e. bottom to top income redistribution via tax laws)

    Let’s talk about how our lost income has trickled UP the ladder in the past 30 years

    And let’s discuss it loudly, out in the open — despite where Mittens would prefer people talk — and especially since he’d like to double Bush’s tax cuts for the richest of the rich.

    What Romney Doesn’t Want You Talking About — Except In ‘Quiet Rooms’

    Too bad for Mitt Romney. Turns out income inequality — that thing he claims has no place in our political debate, or anywhere outside of “quiet rooms” — will be a central theme of President Obama’s re-election message. We know this because one of his top economic advisers essentially claimed as much in a public address at a top DC think tank on Thursday morning.

    And the data he brought to the table suggests Democrats will have an easy time making their case

    “[W]e can’t go back to the type of policies that exacerbated the rise in inequality and threatened economic mobility in the first place if we want an economy that builds the middle class,” said Alan Krueger, chairman of President Obama’s Council of Economic Advisers. […]

    Thirty years ago, the U.S. underwent a shift — from an economy that grew in a way that lifted all segments of society, to an economy that gives heavy preference to the wealthy. That’s the broad story of the last three decades, but as Krueger pointed out, policy has a role to play. The trend abated temporarily in the 1990s, when the country returned to an era of fairly uniform income growth distribution. That all changed for most people, and their lost income has instead trickled up the ladder. Read more…

    Does looking at that graph above inspire “envy” in you — or anger? I don’t think envy means what Romney thinks it means.

    Related: 

    — 2 years ago with 12 notes
    #news  #politics  #unemployment  #war on the middle class  #class  #income redistribution  #envy  #GOP  #income growth  #income inequality  #Mitt Romney  #past 30 years  #presidential candidates  #quiet rooms  #Republicans  #spending cuts for the rest of us  #tax cuts for the wealthy 

    some-disgraced-cosmonaut:

    “We can be poor in spirit”

    If you can stomach it, watch the video here.

    Rich people who don’t care about money. What a cliché. “Well, kids, we can’t eat again tonight because we’re broke. But we’re RICH IN SPIRIT!  Grab your dying little sister who we can’t afford to take to the doctor and, hey, let’s see if we can find a place to live with our spirit! Waddaya say… it’ll be great!

    Yea. No one believes you Ann.

    — 2 years ago with 876 notes
    #ann romney  #mitt romney  #romney  #GOP  #republicans  #republican  #delusion  #ThinkProgress  #1%  #income inequality  #wealthy people who don't know fuck all 
    &#8230;
Marginal Tax Rates and Wishful Thinking
At least since Calvin Coolidge, politicians have trumpeted the supply-side benefits of cutting marginal income tax rates. Lower rates will unleash economic growth and the cuts will largely pay for themselves — or so it’s often said. Yet careful studies find little evidence of such effects. Perhaps it’s time to reform tax policy based on facts, not worn-out assumptions…History shows that marginal federal income tax rates have varied widely…If you can find a consistent relationship between these fluctuations and sustained economic performance, you’re more creative than I am. Growth was indeed slower in the 1970s than in the ’60s, and tax rates were higher in the ’70s. But growth was stronger in the 1990s than in the 2000s, despite noticeably higher rates in the ’90s…If moderate increases in marginal rates wouldn’t much affect behavior, a mix of rate increases and cuts in tax expenditures might be a sensible path. [&#8230;] Finally, income inequality has surged in recent decades. Raising marginal rates on the wealthy is a straightforward, effective way to counter this trend, while helping to solve our looming deficit problem. Given the strong evidence that the incentive effects of marginal rates are small, opponents of such a move will need a new argument. Invoking the myth of terrible supply-side consequences just won’t cut it.

    Marginal Tax Rates and Wishful Thinking

    At least since Calvin Coolidge, politicians have trumpeted the supply-side benefits of cutting marginal income tax rates. Lower rates will unleash economic growth and the cuts will largely pay for themselves — or so it’s often said. Yet careful studies find little evidence of such effects. Perhaps it’s time to reform tax policy based on facts, not worn-out assumptions…History shows that marginal federal income tax rates have varied widely…If you can find a consistent relationship between these fluctuations and sustained economic performance, you’re more creative than I am. Growth was indeed slower in the 1970s than in the ’60s, and tax rates were higher in the ’70s. But growth was stronger in the 1990s than in the 2000s, despite noticeably higher rates in the ’90s…If moderate increases in marginal rates wouldn’t much affect behavior, a mix of rate increases and cuts in tax expenditures might be a sensible path. […] Finally, income inequality has surged in recent decades. Raising marginal rates on the wealthy is a straightforward, effective way to counter this trend, while helping to solve our looming deficit problem. Given the strong evidence that the incentive effects of marginal rates are small, opponents of such a move will need a new argument. Invoking the myth of terrible supply-side consequences just won’t cut it.

    — 2 years ago with 4 notes
    #news  #politics  #tax cuts for the wealthy  #raise marginal tax rates on the wealthy  #income inequality  #class war  #growth  #economy