It was about 35k adjusted for inflation about 30 years ago. it hasn't changed much. Meanwhile, adjusted for inflation, GDP has grown significantly, and, adjusted for inflation, incomes of the richest have skyrocketed. And they are bigger and fancier. Median, you mean? Demand doesn't cause inflation. Inflation is a function of the effective money supply, not demand. We had strong demand in the 1990s without much inflation. I doubt many are buying houses as 6x their income. Banks won't lend you money at that ratio. None of that stuff about their debt has anything to do with the fact that middle class incomes have lagged since "trickle down," In fact, arguably, the decimated middle class incomes is why they've taken on more debt -- they've had to to try to maintain their lifestyle. Because so much more of the nation's income is now going to the richest since Reagan's "trickle down" revolution. And corporations and the wealthy absolutely do decide how much people earn.
You're the one who brought up cutting SS and medicare spending. Making it means tested is one way to do it consistent with the goal of reversing the trend of the wealthy few getting more and more of the nation's income and wealth that is hurting our economy. Sure. Taxes are an obligation to fund the Government, not some guaranteed investment. Sorry, I'm not the one who came up with the trickle down policies. The wealthiest should pay most of the taxes. 1) they have most of the income and wealth, and 2) the taxes are least burdensome to them. But I'm not suggesting that we eliminate middle income taxes complete and just tax the richest. However, IMO taxes should be more progressive -- more in line with what they were before "trickle down" policies. I have never suggested I get anything for free. Don't try to personalize it.
So your wealthy blame the poor for being poor and your poor blame the wealthy for making them poor? Interesting problem you have. I remember the 50's and 60's and how we lived and there is NO comparison between then and today! Today we have millions more jobs, larger governments, and more of everything imaginable. It is impossible for us to have gained so much if everything over the decades went solely to the owners...this is more political BS. Were you better off in 1960 earning $5000 or today earning $35K? BTW; the wealthiest have never received tax reductions when all other taxpayers did not receive the same tax deductions...look at the historical income tax rate brackets and you'll see everyone is paying less today. Did you ever think that within our economic system and global marketplace that it's not possible for the lower and middle classes to greatly grow the economy? Give all of them $10K more and 95% of this will be spent on imports. And all of those imports at Walmart, Kmart, Sears, Best Buy, Apple, every local hardware store, all retail clothing and shoe stores, etc. etc. are not going to be made in the USA. What items can the lower and middle classes consume which greatly grow the economy? This is much more complex than simply demanding that others pay for those who refuse...
In the 50s, 60s, and 70s, the nation's growth was shared by the rich and poor alike -- we all prospered. http://www.census.gov/hhes/www/income/data/historical/household/index.html Since the 1981 Reagan "trickle down" revolution -- not so. The lowest tax payers paid little taxes to begin with so income tax cuts benefited them little, if at all. Most of their taxes are FICA taxes which Reagan raised and were not cut at all (save for a couple years during the recent recession). The big earners are the ones who benefited from the huge income tax and capital gains tax cuts. Why would I think that? Not true. Imports only account for a small portion of overall GDP. Total US imports were $2.7T in 2013, about 15% of GDP. Most of the spending is for products and services in our country. And of course that is not what I have suggested. I've suggested many different things to reverse the flow of our nation's income and wealth to the richest and back to the middle classes.
Forget about adjusting for inflation...I did that when showing old prices versus today's prices. How can you take income from the wealthiest and divert it to the poor? You want the wealthiest to 100% fund the poor? Consumer demand is the primary reason for inflation. Over-expansion of the money supply is also a contributor, and this is not just cash, but also credit, loans, mortgages where people have too much 'credit' money and are chasing a low supply of goods, like homes, which probably caused the housing bubble! Fact is we are consumers on steroids and now it's payback time! Maintaining one's lifestyle regardless of fiscal responsibility is a sense of entitlement. A business must pay wages that will assure employees to satisfy the demands on the business. If a business fails to pay appropriate wages, the business will fail. I'm a farmer and I hire day labor all the time and I never set the labor rates! If I said I want 10 workers at $8/hour, no one will work for me. I have no choice but to pay whatever they demand and this changes from year to year. If the cost of labor becomes too high, I look for automation, contract help, or just close the doors. H/R departments at corporations spend a lot of time and money making sure employees are paid market wages...high turn over or disgruntled workers is a path to business failure...
While there is certainly a point of diminishing returns with any tax scheme, it does apply in both directions. As far as diminishing returns go, there is strong evidence that reductions in taxes on the wealthy over the past few decades have become somewhat counterproductive to overall economic advance and need to be reconsidered. In the 1950s, a period of strong economic growth and increasing median income the capital gains tax rate was 90%. The capital gains tax rate is 15% now, the economy is stagnant and the government is running a huge deficit. It has become quite obvious, since all of the economic growth over the past few years has been in capital gains, that the capital gains tax rate is not high enough for government revenues to increase at the same rate as economic growth. Lastly, and I will continue to say this, demanding from those who can pay for those who cannot will eventually lead to either peace or violence. The direction is entirely dependent on those who have the ability to give. If their psychological makeup is such that they have no empathy and compassion for those who they can help but choose not to, they have positioned themselves in a potentially violent situation depending on the desperation of those seeking assistance. It is quite cynical and inflammatory to imply that those who cannot afford to pay taxes refuse to pay them when in fact the people who refuse to pay taxes are the wealthy. It is the most recent meme of the right wing, accuse those who are on the opposite side of the exact same thing that they are doing and hope that people don't notice.
No matter rich or poor...the people are only willing to pay so much in taxation, and for all income groups, raising tax rates at some point creates diminishing returns. How much national debt has Obama added in the past few years instead of asking Americans to pay for the government which they demand? If Americans are only willing to contribute $3 trillion each year, then reduce the federal budget to $3 trillion. The 1950's and 2010's cannot be compared. Since 1950, ALL tax brackets have been modified and/or reduced...why do you suppose this happened? Paying higher and higher taxes IS NOT about empathy or compassion? You ignore the billion$ of charitable giving every year by the wealthy and assume if they won't pay more taxes they have no empathy? BTW; the wealthy already pay 85% of the income taxes...how much would you like them to pay? Your government is too big, out of control, fiscally irresponsible, and it needs to take steps to be more efficient and effective and solve critical issues instead of ignoring them at the cost of accumulating more and more national debt.
Someone here will know the answer, but I'm guessing capital gains taxes are lower because in order to have cash to invest in capital gains that income tax was already paid....both by corporations and people. If some people earn all of their income with capital gains investments, and pay a lower income tax rate, so what? Every American can buy a house, or property, or public stocks/bonds and realize capital gains. Something like 80 million Americans directly or indirectly own public stocks/bonds, and how many million of them own property, so when you mess with capital gains taxation solely because of jealousy of a few who earn big bucks, you are also impacting tens of millions of average Americans...
So things got better for working people when they had to move into the service sector? You may think you are educated, in that pseudo science, but I don't believe it. The service sector is not middle class jobs generally speaking. The manufacturing sector provided middle class jobs, and the service sector never was on par with it. Innovation removes humans that have to have incomes. If a much lower percentage of people are needed to provide all goods and services, and that is the irreversible trend, you have to rely upon magic hats to produce jobs to replace jobs lost to high tech and automation. Since you never hear economists in the main stream ever bring this us, you must have been educated by the likes of them. You guys are caught in these little boxes you created, and then believed in, as dogmatic as any religious nut. When anyone cannot understand what automation will continue to do, for it is more profitable, you should not be qualified to even speak of an economic model. I call it mis-education. Smart morons.
Nothing is doing anything to anyone! There are no conspiracies or secret profit goals, etc. The US has been in the 'global' marketplace for many decades now, exporting, importing, and using offshore resources. Unless you close the borders of the USA and make it a protectionist nation, meaning either no imports or heavy tariffs on imports, then free trade will continue between all nations who participate. This means US companies must seek out lower priced labor and materials, they must innovate and automate, or even contract offshore for 100% of the products, because they must remain competitive or close the doors. Some things are winners and some are losers in this process, but US labor is both a winner and loser. Obviously jobs lost to offshore or automation are an issue but having healthier US companies also creates more US employment. And yes the types of jobs are going to change over time. Those who see automation/robotics as a growing industry should strive to work in that industry. Let's be honest here...people with little to no skills or education could find jobs in manufacturing and do well, including becoming CEO's and owners of companies. If we have less manufacturing, people with little to no skills and education, are going to be relegated to the service sector, etc. In order for them to move out of the service sector, it requires more skills and education. Since we always have more workers than jobs, people must compete for the limited jobs and higher paying jobs. If they choose not to compete, to just complain about being unemployed and under-paid, they're never going to be happy campers...
The problem is that the US is being exploited for every penny that can be extracted from it and the people are for the most part pathetic morons who are too stupid and lazy to even pay attention to what is happening. We are heading down the road to 3rd world status, and it is exactly what we deserve. When the next economic collapse occurs, which is not too far off, we will see deflation that will make the average person who owes more than they own an impoverished peasant. Ten years from now we will see such prevalence in mechanization of low wage jobs that unemployment will rival other 3rd world nations. As the economy crumbles worldwide, nationalism will once again become popular and wars will rage on a global scale. The peasants will be fed into the war machine like so much fodder to feed the profits for the military establishment. Stabilization as you call it will occur when a few billion of the excess population is eliminated and decades of prosperity for corporations can be realized rebuilding what has been destroyed by decades of war.
It will burst but only when the current administration sees it beneficial to blame on the republicans . In November when the democrats get trounced Obama could instruct Feds to raise the rates when the Republican Senate comes in . The market will tank setting the blame game up so the dems can try to at least save face in 2016. The politicians are going to screw us no matter what.
For 80% of income earners all their capital gains are exempt from the capital gains tax and that means that any argument that raising the capital gains tax would raise taxes on all 80 million who might have some income from capital gains is a completely disingenuous lie. The idea that taxes on capital gains are already paid by the corporate income tax would be true if all capital gains were after tax dividend distributions paid out by corporations but the reality is that less than 1% of capital gains are from dividends. It is an entirely disingenuous argument that appeals to the ignorant. This is not about jealousy but fairness. Income is income and should all be taxed the same regardless of its source. By your argument any gain on any investment that was bought with income that was taxed at some time in the past should automatically be given a tax discount. A reasonable position, one that would not be out of place if the tax scheme provided the discount in the amount of capital gains attributable to the original investment, taxing the rest at ordinary income tax rates. It is a decidedly unreasonable position to champion a tax regime whereby a decades old small investment in an account, now dwarfed by accumulated capital gains, is the justification for a tax rate discount on all gains in the entire account in perpetuity.
Nah, special low investment taxes are so the super rich get special low tax rates. If the richest get to pay lower tax rates than middle class working folks, so what? Shoot, we ought to just exempt the richest from tax and make middle class folks pay it.
What we really need is a 75 percent tax rate on the rich, which would then be used to lessen the damage done to working people who were exploited in order that a few might be rich. Some people say such a tax rate would stop the greed that is seen in the rich, but that isn't true. As long as they could still have more than the peons in society, that would still keep them greedy and willing to exploit others in that greed. We would just distribute the income fairly instead of allowing the top dogs to keep more than a fair share. If you allowed them to have a house twice the size of a middle class house, and a more expensive car and widgets, that would satisfy the need these people have to be better off materially than most people. If god exists, he gave the earth's resources to all of the humans he created in his image. And then left it up to us to make sure everyone shared in those resources in a fair manner. Trouble is, man is greedy, and when a few can keep most of the resources for themselves, even if they cannot ever use it, that is exactly what creates the rich and the poor. Yet this society worships the men who are greedy, and who sit on more than they could ever use in 100 lifetimes. We worship sociopahty, especially the conservatives. Fairness to some people is untenable, and immoral. It is the insanity of being a sociopath. Yet we seem to value it, worship it. LOL. And only a sane mind can see the truth of this, which means so many of us are utterly insane. But insanity doesn't knows its insanity. LOL
I think those are symptoms not causes. If you look back at our economy during the last 40 odd years, what you see is a hands off approach by the government with one exception, the military industrial complex. We sustain military spending and power by spending federal dollars each and every year and it works for that industry. What we do not do is use that same method to promote a higher good in other sectors of the economy. Because we bought into the Friedman/Reagan model, we sat by and let markets decide what happens. Once you do that and open up free global trade; technology, demographics, education, finance and competition force economies into the model we have today. This is going to get worse over time unless we stop this silly fear of the government making up the difference. Rather than hate the government, we should be thinking how best to utilize its mighty power to get the best out of the dollars we spend. Simply put, we have the tools to make this economy work, all we need is the will to use them.
Please explain how people can avoid capital gains taxes on stocks, bonds and property? Fact remains, capital gains investments and taxation are not solely for the wealthy...mainstream America is involved as well. Never mentioned anything about dividend capital gains? I said that in order to have the cash to invest in capital gains tools, that cash was already taxed, therefore, perhaps this is one reason why capital gains taxes are less than ordinary income taxes. Income is not income?? There are myriad incomes and tax rates and there is no rational reason for everything to be taxed at the same rate. What do you believe you will gain by increasing capital gains taxes to match personal income tax rates? And, do you see any downside in your preference?
So you are saying the wealthier Americans don't pay any personal income taxes...just capital gains taxes? And, who cares if a person only has capital gains investments? If the wealthier Americans were not already paying 85% of the income taxes in the US then your comments above might get a little traction...but...they are paying the bulk of the taxes yet you are not happy with the status quo. Your problems and solutions to taxation in the USA are not about the wealthy! Can you not find any other alternative to achieve whatever the heck you are trying to achieve?
Nope. Though the uber rich typically get a much higher share of their income from investments as opposed to working. I don't care at all, really. It's the fact that they get special privileged low tax rates while working people pay higher rates because of it I care about. They should be. They are getting the bulk of the nation's income. Sure they are, as I've explained many times. Many 1% apologists like you simple choose to ignore it. I given many different proposals, many time. Fixing the inequality in the tax rates is just one of them.
What is wrong with our economy? Here, the prophet called George Orwell tried to warn us, but to no avail. And.. http://www.truthdig.com/report/item...ares_and_neoliberal_authoritarianism_20141018 So this seems to be the problem with our economy. And the cause of the death of this republic as well.
This is another particularly lame 1% apologist argument. That everyone gets to take advantage of the special privileged low investment tax rates lie the uber rich do. It's bull(*)(*)(*)(*). First of all, tens of millions of poor folks simply cannot afford to invest. Second, scores of millions more invest in tax deferred 401ks or IRA, where they will have to pay the full income tax when they withdraw their money. Third of all, the 1% and up own the vast bulk of investment in this country. But if you really have an issue with the poor folks out there having to pay higher investment tax rates, we can simply exempt the first $20k or so in investment income. That will protect them.
"This is a state in which people participate willingly in their own oppression, often out of deep insecurity about their freedom and the future." Interesting piece. RW propaganda is very powerful stuff. We see the misinformation it spreads being regurgitated here by acolytes as well on a daily basis here.
We should not care much about the so-called 'uber-rich'? There are only a few people in this category as compared to 315 million Americans. Every uber-rich person I can think of spends million$/billion$ which all of it energizes the economy. I wish we had 1000 more Bill Gates and all of them paying the same effective tax rate that Bill pays. Conversely, you wish to punish Bill and the other uber-rich as if they are not huge contributors to the economy. Too bad you cannot fathom what the economy will resemble if you remove from it all of your uber-rich people? Take more and more of their wealth and give it to government...the most inefficient and ineffective thing you could possibly do with that money! I would prefer lower and middle class people pay their way with FICA contributions instead of 'giving' them $4K more per year which will be spent primarily on imports. Can you not see any downside to removing productive cash from the wealthier and giving it to government? If the wealthy volunteered to fork over another $100 billion, government will spend it chasing terrorists all over the world. If you give that $100 billion to Americans, again it will just be spent on imports...sure they get another and larger flatscreen but it doesn't much help the US economy. So when one person earning $35K pays $4K on federal taxes and another person earning $2 million pays $400K on federal taxes, you have zero empathy for one person forking over $400K and just focus on the percentage that each is paying...is this correct? Both receive the identical services from government yet one pays $4K and the other pays $400K? IMO all of us need to pay more than our fair share in order to support those who are incapable of supporting themselves, however, I don't believe the wealthier should be paying more than their fair share to support capable Americans who CHOOSE to earn between minimum wage and $35K/year...
