An Idea Whose Time Has Come?

It appears that the "no tax" Republicans in charge of state governments are "no tax" only to the benefit of the richest in their states.  Here's a link to a report on the situation and recommendations for how to fix it.

http://keystoneresearch.org/taxfairness

Taxing Top Incomes at the Same Rate as the Middle Class Could Fund Critical State Priorities, Including Education, Infrastructure, and Public Pensions

Condensed Guides to Inequality in the US

You might be one of the many who haven't the time or the inclination to read the latest best seller on the topic of how the economics game in the US is rigged in favor of the super rich.  If so, you might want to check out this summary by Nicholas Kristof:

http://www.nytimes.com/2014/07/24/opinion/nicholas-kristof-idiots-guide-to-inequality-piketty-capital.html

And if you prefer a humorous approach to the topic, John Oliver has just the thing for you in this video:

https://www.youtube.com/watch?v=LfgSEwjAeno

John Oliver Explains How the Wealth Game is Rigged

Here's a great post from Vox.com with a video from John Oliver's "Last Week Tonight".

http://www.vox.com/2014/7/14/5897797/john-oliver-explains-wealth-gap

Is false optimism shaping your view of what's fair when it comes to taxation?

Because They Believe Our Country is More Important than Their Money

Did you know there's a group called Patriotic Millionaires?

They recently sponsored a lively discussion between economist and author Thomas Piketty and Senator Elizabeth Warren.  It's definitely worth watching.

http://www.youtube.com/watch?v=uEYAS5U5Wuk

I agree with Senator Warren: Inequality is not inevitable.  Right now the game is rigged for and by the super-rich.  But, we have our voices and our votes as leverage for change.

How Big Money Endangers Democracy

This video by Robert Reich* recently came to my attention.  In 3 minutes, it provides the premiere example of how big money endangers democracy.

http://youtu.be/QJip9qX-Qy8

It's an easy way to get informed about this important issue.  You might want to take a look at Reich's YouTube videos on other topics such as raising the minimum wage, too.

* Robert B. Reich (currently a Professor of Public Policy at University of California at Berkeley) has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President-Elect Obama’s transition advisory board. He has written twelve books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet,Supercapitalism, Aftershock and Beyond Outrage.

Raise the Minimum Wage - Advice to US from the IMF

There are steps Congress can take to counter the effects of an economic game that is rigged to favor the richest among us.

The International Monetary Fund is calling on our lawmakers to raise the minimum wage. Last week, the IMF issued their annual review of the U.S. economy, and they said that there is a lot more we can do to fight poverty. Our federal minimum wage puts us at number 11 on the list of developed nations, and our social safety net ranks even lower in comparison to other countries. We're the richest nation on Earth, yet we allow millions of people to remain in poverty. In addition to raising wages, the IMF says that tax credits that benefit low-income families should be permanently extended, and expanded to cover more Americans. The Earned Income Tax Credit and the Child Tax Credit are set to expire in 2017, despite the fact that they have the highest impact on low-income families. These recommendations could help lift millions of Americans out of poverty, but they both require that our broken Congress actually gets something done. Republicans refuse to listen to economists in our country, but maybe they'll take heed to the IMF's important advice.  (Source: transcript from "On the News with Thom Hartmann)

When we elect Representatives and Senators in November, let's throw our support behind candidates who will follow these recommendations - Democrats.

Why Inequality Matters

The CEO of one of the worlds richest banks, Lloyd Blankfein, was recently interviewed by CBS news and had this to say: “...too much of the GDP of the country has gone to too few of the people...If you grow the pie but too few people enjoy the benefits of it, the fruit, then you’ll have an unstable society.”

Read an analysis of the issue and watch a video of the full interview at the link. The income inequality comments are at 4:30 minutes into the interview.
http://thinkprogress.org/economy/2014/06/13/3448679/goldman-sachs-income-inequality/

It's important to vote for candidates who understand why inequality matters and will work to do something about it.

Saving the Middle Class through Tax Reform

Here's an excellent interview of Nobel prize-winning economist, Joseph Stiglitz, by Bill Moyers.

How Tax Reform Can Save the Middle Class

From the transcript:

JOSEPH E. STIGLITZ: It's amazing. And Americans have not yet grasped the reality of where we are. That our economic system has not been delivering for most Americans. And the fact that this has been true and that we have no longer a country where there's opportunity, where the life prospects of a young person are so dependent on the income and education of his parents means that our view of the way our economic system works has to change.
   My view is that these are not inevitable. These are not just the result of the laws of economics. You know if it were just inevitable, just the laws of economics, you'd say, as an economist, you'd say, well, that's the way it is. You know, that's, nature didn't deal us a good hand.
  But it's our policies and our politics that have shaped our economy, and shaped it in ways that have not served most Americans. And an important part of those policies are our tax policies.

And some of his comments on US markets:

And the evidence is so overwhelming that our markets don't work perfectly, that markets can and are an important force. But we have to shape markets. Come back to our theme of taxes, taxes are one of the ways we shape markets.
    If our tax system says speculation is going to be taxed at a lower rate, you're going to get more speculation. If our tax system says if you keep your money abroad, you don't have to pay taxes, you're going to get more money abroad and you're going to get less job creation inside America. If your taxes say we want to encourage real investments in America, then you can get more investment in America. So I'm an economist who believes that incentives matter. But I also believe that you have to shape incentives and that markets on their own don't necessarily shape them the right way.
   And that when we have a distorted tax system, distorted by a distorted political system that has given a huge amount of weight to the upper one percent, to the corporations, then that kind of distorted political system leads to a distorted tax system, which leads to a distorted economic system, which leads to an economy that is not performing as well for most Americans.

Listen to the full interview and you'll be ready to push for change in tax policy?

Wealth Grows Faster for the Few than Income Does for the Many

If you haven't heard of Thomas Piketty and his new book "Capital in the 21st Century," you can find an excellent introduction to his work here: http://www.truth-out.org/news/item/23817-thomas-piketty-the-market-and-private-property-should-be-the-slaves-of-democracy

The site features both a video and a transcript of Piketty's remarks.

Here's a sample of Piketty's views on taxation:

I think it is important to realize that wealth is going to be increasingly important as compared to income in the 21st century. Therefore the taxation of wealth is going to be more and more important as compared with the taxation of income. We need both, of course, but we need to rethink the taxation of wealth. In most developed countries the way we tax wealth right now is through property taxes. So for instance in the US or in most European countries you tax real estate property just in proportion to their value. So it's not progressive and also because these property taxes were set up in the 19th century, they do not really take into account financial assets or financial liabilities. So I think it would be important to adapt them to the structure of wealth in the 21st century. And it will be adequate to transform these property taxes into progessive taxation of net wealth. So for instance, if you have a house worth $500,000 and you have a mortgage of $490,000 your net wealth is only $10,000. You are not rich in any way. So in the current property tax system you shouldn't pay as much property tax as someone without a mortgage. And sometimes you even have people whose property value is below their mortgage and they keep paying the same property tax. So I think this is just not the right way to tax wealth. And both to allow people to access wealth, to accumulate wealth and also to limit the concentration of wealth at the top end of the distribution, we need to have a progressive tax on net wealth.

Supreme Court Decisions and Income Inequality

Yesterday, economist Joseph Stiglitz testified before the Senate Budget Committee.  Today the US Supreme Court announced its 5 to 4 decision declaring limits on the total amount of money individuals can give to candidates, political parties and political action committees unconstitutional.

Stiglitz's prepared remarks on income inequality are worth reading and can be found here: http://www.nextnewdeal.net/stiglitz-why-inequality-matters-and-what-can-be-done-about-it.

Here is the section of his remarks that made the connection with the Supreme Court's decision for me (highlighting mine):

(W)e pay a high price for this inequality, in terms of our democracy and nature of our society. A divided society is different—it doesn't function as well. Our democracy is undermined, as economic inequality inevitably translates into political inequality. I describe in my book how the outcomes of America’s politics are increasingly better described as the result of a system not of one person one vote but of one dollar one vote. One of the prices we pay for the extremes to which inequality has grown and the nature of inequality in America—both inequality in outcomes and inequalities of opportunities—is that we have a weaker economy. Greater inequality leads to lower growth and more instability. These ideas now have become mainstream: even the IMF has embraced them. We used to think of there being a trade-off: we could achieve more equality, but only at the expense of giving up on overall economic performance. Now we realize that, especially given the extremes of inequality achieved in the US and the manner in which it is generated, greater equality and improved economic performance are complements.

More information about the Senate Budget Committee hearing can be found at:  http://www.budget.senate.gov/democratic/public/index.cfm/2014/3/meet-the-witnesses-joseph-stiglitiz-and-raj-chetty  There are links to more information about the two economists, Stiglitz and Chetty, at that site.

Are We Revisiting the 1920's?

Here's an article from Think Progress that cites some evidence that income inequality is at 1920's levels.  I don't think anyone would claim those days to be worth repeating.  Thirty years of policies favoring those with the highest incomes have taken their toll.

http://thinkprogress.org/economy/2014/03/31/3420998/wealth-inequality/

The following graph is from the article.  The whole thing is worth reading.

A Meaning of "Rent" That Many Aren't Familiar With

In his post at Triple Crisis, James K Boyce quotes one of the clearest explanations of the economists'  term "rent" that I've seen:

Rent isn’t just the monthly check that tenants write to landlords. Economists use the term “rent seeking” to mean “using political and economic power to get a larger share of the national pie, rather than to grow the national pie,” in the words of Nobel laureate Joseph Stiglitz, who maintains that such dysfunctional activity has metastasized in the United States alongside deepening inequality.

When rent inspires investment in useful things like housing, it’s productive. The economic pie grows, and the people who pay rent get something in return. When rent leads to investment in unproductive activities, like lobbying to capture wealth without creating it, it’s parasitic. Those who pay get nothing in return.

The entire article is worth reading and can be found here:  http://triplecrisis.com/rent-in-a-warming-world/