I'm back! All paper work finished. Patient safely sleeping with heart a-beatin'. . . irregularly, but beatin'.
Soooooooo. . . . . .
I really need to explain why I picked this article. I picked it because I noticed that it was written by someone who's career is in the financial world. He crunches numbers. Tries to make money work harder for people through investments.
I'm taking for granted that he is using reasonable and trustworthy sources for his statistics. And it's with these statistics that he draws the conclusions outlined in his commentary. (This is a commentary, by the way. I pulled it from the "Opinions" page of the Times Union.)
Understand that I'm not a well educated economicist (sp?). I'm not even sure how to spell the stupid word! :chuckle So I rely on the expertise of others to provide statistical and analytical information in dealing with the subject of economics.
The writer of the commentary:
Steven Rattner is managing principal of Quadrangle Group LLC, a private investment firm. He wrote this article for The Washington Post.
Here's a guy who shows concern with regards to varifyable growing gap between the rich and the poor. Additionally, he makes the assertion that Income Tax structures shouldn't play a part in making the gap worse!!
Kevin, I've re-read your thoughtful response to this commentary. You seem to reiterate what Mr. Rattner wrote explaining why a certain working class of people have declining incomes contributing to income inequality. The forces of "classic labor market economics" (quoting a phrase by Mr. Rattner) are at play here.
This seems understandable even to a economically simple-minded person such as myself.
With regards to the tax structures augmenting the inequality between the "rich and the poor", Mr Rattner comments:
Most discussions of income inequality properly center on pretax statistics, in search of a true measure of how the labor markets and the economy are functioning. Considering pretax income is also proper because we should not legislate or redistribute our way to income equality. But neither should tax policy worsen the disparity between rich and poor.
Widening that gap is what we've just done. According to analysis by the Tax Policy Center of the Brookings Institution and the Urban Institute, the new tax provisions will raise the after-tax income of Americans making more than $1 million by 4.4 percent while raising the average American's income by only 1.8 percent. More than 70 percent of households will receive $500 or less. For 8 million lower-income Americans who pay taxes, the news is truly dispiriting: no tax cut at all.
That's because the bulk of the cut will be used to reduce capital gains and dividend taxes, and even though ownership of stocks has broadened in the past decade, the highest-income Americans still have a disproportionate share of the wealth. In fact, distribution of wealth is even more unequal than the distribution of income. In 1998, 47.3 percent of households' "net financial assets" resided with the top 1 percent of Americans, according to an analysis of consumer finance data by Edward Wolff.
This whole set of paragraphs is worth repeating which is why I "quoted it". Not only are the rich benefiting the most from the tax cut, they're benefiting from reductions in capital gains and dividend taxes from ownership of stocks which MANY AMERICANS CAN'T AFFORD TO BUY!!!!!
Here's your comment, Kevin, in apparent response:
The second problem addressed by the author (and his main point, really) was how "unfair" the tax cuts are. After all, how fair is that the richer you are, the greater tax cut you are getting? Well, I can accept this argument only if you really believe that "progressive taxation" is fair. Under this kind of taxation, the more money you make, the greater percentage of your salary you will lose to taxes. Only in a liberal's mind is this fair. A simple example: If you make $50, you fall into a 10% tax bracket, and pay $5 in taxes. If you earn $100, then you fall into the 10% category, and pay $20 (FOUR TIMES what someone who makes half your salary pays). Sorry, but you can't make that sound fair.
First off, the people who make tons of money do so through stocks, bonds, futures, etc. Again, I assert most Americans can only dream of making money off money. I support progressive taxation especially as it relates to money being made off investments. Why not?!? Using your example, Kevin, (and modifying it just a bit): The person who earns $100 through career income and portfolio income will still make $80 after the progressive tax! That's still a lot of money!!! The guy who's making $50 ($45 after taxes) is still making less that what Mr. Richo is making AFTER taxes!
But I'm only commenting on what Mr. Rattner's commentary and Kevin's reply.
Understand that I am totally against ANY
tax refund this year. Mainly because:
It just doesn't make any fiscal sense to have our country go farther into debt!
Meanwhile. . . . The rich ARE getting richer. The poor ARE certainly not getting richer if they're not getting poorer. . . . not thanks to this recent round of "tax refunds".
And that's just in the United States.
The "Gap" between the rich and the poor is even wider on a world-wide scale.
More to follow. . . . hopefully!