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.