Monday, July 23, 2012

Economic Equality/Recovery

I’ve been enjoying a new (to me) site named Jobsanger lately. He’s a bit more liberal than I am, and a bit less critical of our present government, but that’s not an altogether bad thing, and his writing is worth reading. He had a piece Sunday about economic inequality with a list of things we need to do to restore equality.

I’m not sure about restoring equality, I’m not as convinced of the importance of the “wealth gap” as some people are, but most of the list has a lot to do with simply restoring our economy. This is his list and my comments.

We need to strengthen unions (which was the driving force in building the middle class). Unionism had some political power that I’m not sure needs restoration, but I certainly agree with the need to restore collective bargaining. I’m not sure it was the driving force; I think the GI Bill might have played an equal if not larger role, but I’m glad to see this first on his list.

We need to tax the rich more (because they are taxed now at the lowest level since WWII). Actually, I think we need to tax everybody more, returning to the Clinton tax rates. This assumes that middle class incomes can be restored, but if some other items on the list are successful it will be.

We need to tax all income at the same rate as earned income (with no special rate for capital gains). I think that long term gains from the appreciation of assets, held five years or more, should be taxed at a lower rate. Our problem now is that we tax short term gains at a lower rate, and we classify fees on financial manipulation as capital gains which is absolutely nonsensical.

We need to remove unneeded corporate subsidies and make sure corporations pay their fair share of taxes. I’m not crazy about “fair share,” which is not actually a definition, and remember that this is a tax on income that goes to people who pay tax on that income. There is much to be said for the Subchapter S approach, which doesn’t tax the business at all, but passes that income on to the owners of the business, who then pay regular income tax on that money.

We need to raise the minimum wage to its 1967 buying power. I’m not sure what is so magical about 1967 but, yes, we need to raise it.

We need to create more good jobs in this country, and stop sending American jobs to other low-wage countries. Robert Reich wrote an interesting piece on this. It’s not that simple. We need to create an infrastructure of both human and physical resources that will make it both feasible and profitable for not only US business but foreign business to create jobs in this country. Elizabeth Warren uses the pitch that when you build a business in this country you build it using highways and such that the nation provided, and we have been deficient in providing both physical infrastructure and proper education for decades.

We need to put more money into K-12 education, and make it less expensive for students to attend college (because education has always been the best path up the economic ladder). Yes. See the preceding point. This is part of what Reich is talking about.

We need to create a single-payer government-run health system for all Americans (like Medicare) -- lowering benefit costs for businesses and allowing them to compete on a level playing field with other countries. Again yes, not to mention providing better healthcare to the people of this nation at vastly lower cost.

We need to re-regulate banks and Wall Street, and prohibit them from gambling in the stock market with depositor money. Not to mention punishing and, more importantly, removing from the financial system those who committed the crimes which caused the economy to collapse.

We need to put more money into social programs to help Americans that have been left behind and are hurting. More importantly, we need to make sure that the social safety net becomes a temporary measure, and that when people are left behind the safety net is a measure which allows them to catch back up rather than an alternative universe because there is nothing to catch back up to.

We need to make huge cuts to the military budget (because there's simply no justification for spending nearly half of the entire world's military spending, and this money can be spent better helping Americans). And not merely the military, but the entire “national security” gravy train.

We need to eliminate the cap on FICA taxes, and make those who are rich pay the same percentage as workers currently pay. “Those who are rich” is a measure of wealth, not income, and the tax is not merely only on income but is specifically only on income produced from work. Income from investment is exempt. But, yes, we should ditch the cap.

As a final note, America has traditionally been a nation which admired success. Obama is pushing hard on his “tax the rich” thing, which I think is divisive and is creating a sense that “the rich” are somehow the enemy. I certainly favor a tax structure which is more progressive, but I believe it should be presented as a new tax structure from top to bottom and not merely as “raise taxes on the rich.” The difference is semantic, but semantics matter.

2 comments:

bruce said...

I wonder what era he is thinking of. Collective bargaining is fine, but the politics that supports untenable financial deals is not. I also

wonder what industries /jobs /etc he's proposing to unionize? The GI Bill certainly did a great deal years ago and still could to a degree

today but not to that level I think.

"Tax the rich" is a drumbeat to encite the masses, and is a distraction at best. Should they pay more taxes? yes, probably, but many of

"the rich" pay little INCOME tax and low capital gains taxes. Perfectly normal and legal.

Government services have to be paid for somehow and that's what taxes are for. You want the services, pay the taxes. All the tax
cutting is a short term bandaid on a long term bleeding problem. Yes, if the middle class gets thier bleeding stanched, then yes you could

raise taxes (or at least keep them level). The poor, of course, pay no taxes. Well, maybe they do, If they're employed at all. Unemployed

and (some) seniors on SS pay no taxes. (of course Jayhawk will correct me if I'm wrong here).

Capital gains should be be dealt with on a longer term basis than it is now. Too many corporations and executives think short term for

thier profits and stock, not long term fpr the good of the company as a whole. Perhaps on a sliding scale with lower taxes for longer

terms.

Financial manipulation can be an ugly business and ought to be regulated and taxed, if for no other reason to keep the BS to a minimum.

Profiting off of just moving money around is distastful. Regulation to preven egrarious and risky conduct should be manditory. Gamble with

company money, not public deposits. Remove the "too big to fail" mentality, as this creates a philosophy of no risk. You mess up, you fail.

"Pay their fair share" is certainly a nebulous term and can be manipulated to anyones definition. I think everyone from top to
bottom ought to pay something. No caps or anything is a good idea, and yes, consider a tax all income, earned or investment.

Find a way to tax fairly at all levels of income AND wealth. Reward success, but not demonize wealth.

Minimum wage is just that, a minimum. In many cases, depending on location and cost of living, it isn't a living wage.

bruce said...

Not sending american jobs overseas is like you said, not as simple as that. Costs of manufacturing overseas used to be a lot
lower, now not so much. Some of that is no better. Call centers can be cheaper, but there's no reason they have to be overseas,
we can train people here to do it (goes with improving the educational system too). Overseas call centers could have the
advantage of 24/7 coverage, but that can be done here too.

By the way, we are not outsourcing plumbers, electricians, auto mechanics and the like. And these can be good jobs right here, too. Not all

of these need an expensive college degree. You may need a college degree to be an auto technician nowadays, but these are necessary jobs

that need to be brought out into the open as such.

It seems as if we are treating education as a corporation (cutting workers, increasing CEO pay, etc). Maybe a national service or something

to help with college costs.

A single payer system with single source funding and paperwork would make everything easier for everyone at all level and places
in the system. Even if it means higher taxes, you get something for it. It can be set up for covering everyone for the basics and hospital

care and fee-for-service for other things like plastic surgery. Just an example. Subsidize medical education so that docs aren't burdened

by huge loans, or make it a public service for education.

Social programs should be a safety net, but not a hammock. Yes, we whould help those who are in dire straits, especially not of thier

making. But that should also not become a way of life either. That goes hand in had with fixing the economy & education system so that

there is a viable way out of the safety net. Otherwise it becomes the twilight zone. Social Security was originally designed as a safety

net for the poorest who had nothing at all. You were expected to provide something for your own retirement.

The military-industrial complex has expanded to all states and therefore creates an employment and tax benefit issue for keeping
it alive. All well and good, but why do we need so much stuff? And why so complicated and expensive? I like high tech, but come on, too

much already. Side issue of what do you do with the socio-economic issues of a downsized military, and reduced defense /security spending.

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