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400 richest Americans’ incomes doubled under Bush tax cuts; economy collapsed

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clipped from thinkprogress.org
Bloomberg reports that, according to recently released IRS data, “the average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million.” Much of their income came from capital gains resulting from the Bush tax cuts:
The drop from 2001’s tax rate of 22.9 percent was due largely to ex-President George W. Bush’s push to cut tax rates on most capital gains to 15 percent in 2003
Capital gains made up 63 percent of the richest 400 Americans’ adjusted gross income in 2006, or a combined $66.1 billion, according to the data. In all, the 400 wealthiest Americans reported a combined $105.3 billion of adjusted gross income in 2006, the most recent year for which the IRS has data.
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Observe the present economy. Like what you see?

O'Pari Luxury Yacht
Image by yachtfan via Flickr

Certainly the tide has risen for the very wealthy: their fortunes have doubled. But has this “rising tide” lifted “all boats?” Has trickle-down affected your income? Can we say that business has been stimulated?

Perhaps it’s a good time to wonder why tax cuts for the rich did not result in national prosperity as promised.

Mired on the shore in our jonboats, most of us look on as the yachts head for the open sea.


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Written by Monte

January 31, 2009 at 12:39 pm

Why cutting rich folks’ taxes doesn’t stimulate the economy

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And what does.

Another fascinating post comes from the ever-excellent True Conservative.

Consider: In 2007, only 9% of privately-held U.S. businesses … cited a “shortage of long-term finance” as a constraint on expansion. “Shortage of skilled workers” is No. 1.

So how do you increase the number of skilled workers? Here’s the story:

clipped from trueconservative.typepad.com
Here’s the central tenet of supply-side/trickle-down/voodoo Reaganomics:
If rich people get (and keep) more money, they will invest it and promote economic growth, so everyone will prosper.
That would (perhaps) be true if a shortage of investment were an important constraint on businesses […]
But availability of investment money is the least important constraint […]
[I]t ranks dead last on the list of business constraints. […]
A shortage of skilled workers in now the #1 constraint […]

Constraint 2
[This is the] economic view so ably explicated by James Livingston, which I summarize and link to here […]
The fact is that wealthy people can’t find truly productive investments offering sufficient returns, so they turn instead to investments that don’t have anything to do with production or productivity. (Think: MBSes, CDOs, CDSes, etc.)[…]
Since the greatest constraint on growth is currently a shortage of skilled workers, the best path to prosperity seems to be taxing those unproductive dollars and investing them in the thing that … is prosperity-producing: education.
Making sure that wealthy people have plenty of money is not the way to produce prosperity. That’s a self-serving myth […]
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Provocative, eh?


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Written by Monte

November 21, 2008 at 10:50 pm

US like developing nations in income inequality

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The USA is becoming more akin to Sri Lanka, Mali, and Russia in income inequality than it is like Sweden, Switzerland, or the UK. We’re starting to resemble a developing nation with huge gaps between the very rich and the rest of us, while the middle class loses ground.

Is it really wise to offer more breaks for the rich? Where’s the trickle-down from the last eight years?

clipped from www.dailykos.com

The Gini index (or coefficient) is a measure of income inequality, with 0 meaning everyone has the same income and 1 meaning one person has all income and everyone else has none. As Elizabeth Gudrais noted recently in Harvard Magazine’s Unequal America:

For the United States, the Gini coefficient has risen from .35 in 1965 to .44 today. On the per-capita GDP scale, our neighbors are Sweden, Switzerland, and the U.K.; on the Gini scale, our neighbors include Sri Lanka, Mali, and Russia.

Those some are becoming more numerous as a result of declining earnings. Real weekly wages (real: meaning adjusted for inflation) in the United States rose during every decade from 1830 to 1970. But since 1973, it’s been mostly a downhill slide, with the exception of the late ‘90s.

1964: $686

1974: $714

1984: $632

1994: $589

2004: $630

2008: $612

The wealthiest 1% of Americans earned 21.2% of all income in 2005
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004
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Written by Monte

October 26, 2008 at 9:15 pm

Posted in Politics

Immigration, sacred conservatism, and jubilant self-strangulation

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Have you noticed that “trickle-down” trickles up? Decades removed from Reagan himself, the American rich are vastly richer, the rest of us, on average, are about the same or less well off. Zealots may say conservative economic moves just haven’t been radical enough. But shouldn’t good medicine help a bit, even in medium gulps?

There may be a link between the current immigration crisis and this legacy. Here are some excerpts from a thought-provoking essay well worth reading at DailyKos:

Currently undocumented immigrants flood over the borders daily risking their lives, and sometimes losing them, in order to find work and security in the United States….

Americans of all political stripes are concerned about this situation and there is great division on exactly how to solve the problem. Some have advocated a tightening of security and closing of the porous border as a solution. Others have promoted a method to regulate and legitimize the flow of the undocumented.

But there is one thing missing in both of these strategies. Neither contains any analysis of why this problem exists, Read the rest of this entry »

Written by Monte

November 11, 2007 at 6:22 pm

Jesus’ preference for the poor (my sermon for January 28, 2007)

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apsemosaicstcatherinesmonasterysinai-c565.jpg[FYI: this sermon is a combined version of two – we were snowed out on January 21. You’ll see quotes here from Disclosing New Worlds, video The Miniature Earth, screencaps from Global Rich List, and Syed Abbas (supreme leader of north Pakistan’s Shia) from Three Cups of Tea: One Man’s Mission to Fight Terrorism and Build Nations … One School at a Time. Hope you find some good stuff!]

Early in his ministry, Jesus goes home to Nazareth. As any observant Jew would do, Jesus goes to synagogue on the Sabbath, where he’s invited to read the Scripture aloud and teach. Here’s what he reads:

“The Spirit of the Lord is on me,
because he has anointed me
to preach good news to the poor.
He has sent me to proclaim freedom for the prisoners
and recovery of sight for the blind,
to release the oppressed,
to proclaim the year of the Lord’s favor.”

“To preach good news to the poor …”

What if every church in the world represented itself that way? What if our buildings said (on the outside): GOOD NEWS FOR THE POOR.

I hear those words with some discomfort. Because, to be honest, I have often scarcely heard them at all. Read the rest of this entry »

Written by Monte

January 30, 2007 at 1:27 am