Taxing The Rich Is Not A radical Idea, It’s The New Reality/ GOP Dark Monies Won’t Fix This

If those millionaires and billionaires are worried that the ground has shifted under them where the vast majority of voters do want the rich taxed more, they’re right. They’ve created this chasm where the average American has figured out who’s really responsible for their being financially squeezed and it isn’t the other (fill in the blank) or in the case of the republican President Donald Trump, the bogeyman of the immigrant.

No American begrudges the wealthy their hard earned monies although a lot of their revenues are based on income from existing wealth, but most working Americans insist on fairness when it comes to the rich making monies, at the expense of the average Joe American.

Image result for MEMES OF ALEC American Legislative Exchange Council

It hasn’t always been this way. As per EPI (Economic Policy Institute), from WWII – 1973,  when US corporations productivity numbers increased to 95.65%, the average workers’ pay wages increased to 91%. This paradigm shifted after 1973.

My theory is that the average American Joe worker’s lot changed in 1973 with the start of ALEC (American Legislative Exchange Council ),  which is a non profit organization set up to advance corporate and other conservative interests.

As per Wikipedia,  “ALEC provides a forum for state legislators and private sector members to collaborate on model bills—draft legislation that members may customize and introduce for debate in their own state legislatures. ALEC has produced model bills on a broad range of issues, such as reducing regulation and individual and corporate taxation, combating  illegal immigration, loosening environmental regulations, tightening voter identification rules, weakening labor unions, and opposing gun control.

This is what has been happening for decades. Since 1978, the average workers’ wages have been stagnant, whereas most consumer goods like shelter, food, medical costs, medications, costs of a college education have increased by anywhere from 244% to over a 1000%. The concept of corporations providing for pension funds has gone the way of the dodo bird. Unions within the corporate world have been systematically crushed.

Some corporations have substituted pension plans with 401k retirement plans based on the whims of the stock market to be funded with the employees own monies with some companies offering matching funds up to a certain limit. With rare exceptions there’s no oversight group to insure that financial investors don’t select stocks based on fees they earn, etc. The average worker isn’t stock/ investor savvy. Most likely, if they call the managing group of their company’s 401k plan, they are told to review a “Morning Star” publication which for them, is like reading Greek. There are no funds that I’m aware of, where employees can choose and be guaranteed a bottom rate of return of at least  5%.

As per a 9/3/2009 NYT report, “Once upon a time, defined benefit pensions were the norm and helped employers gracefully ease more employees into retirement during downturns (potentially by sweetening the pension deal a little). It was not until 1978 that Congress first set up 401(k)’s — private, tax-favored savings vehicles intended to supplement traditional pensions (and promoted by ALEC). Over time, as companies decided to shake off some of the risk associated with supporting their retirees, the defined contribution pension system grew to largely replace the defined benefit system.”

DESCRIPTION“Note the swing from 1980 to 2006 in the types of pension plans covered employees have. (Many employees remain uncovered by a pension plan of any kind, of course.)”

“Unfortunately for workers, having control over their own pensions doesn’t always end up so well. A recent study from the Employee Benefit Research Institute found that at the end of 2007, about a quarter of Americans ages 56 to 64 had 90 percent of their 401(k) account balances in stocks, instead of more conservative investments. High administrative and investment fees can also erode privately managed retirement benefits.

As a coup de gras, and at the behest of some of these rich folks, President Trump’s administration did away with the Obama era ‘fiduciary rule’ requiring managers/ financial advisers managing peoples’ 401k retirement funds to act in the best interests of the clients.

Paul Ryan

@SpeakerRyan

Pleased that the Obama administration’s fiduciary rule has been struck down by the courts. It was Obamacare for financial planners. This is more good news for the economy.

Dr. Phil Roe

@DrPhilRoe

The U.S. Court of Appeals ruled to vacate the @USDOL’s flawed fiduciary rule which is a victory for every American saving toward retirement. Read more on this decision here: https://roe.house.gov/news/documentsingle.aspx?DocumentID=398300 

WealthManagement.com

@wealth_mgmt

BREAKING NEWS: The Fifth Circuit Court of Appeals has ruled to vacate the DOL http://ow.ly/Znj330iYDVw

Court of Appeals Vacates DOL Fiduciary Rule

The Fifth Circuit Court of Appeals argues the Department of Labor lacked the statutory authority to promulgate the rule; a major victory for the brokerage industry.

wealthmanagement.com

MichaelKitces

@MichaelKitces

A dark day for consumers and real financial advisors.

Not only for the overturning of the Fiduciary rule… also takes pressure off the SEC. :/ RT @wealth_mgmt: BREAKING NEWS: The Fifth Circuit Court of Appeals has ruled to vacate the DOL http://ow.ly/Znj330iYDVw

Court of Appeals Vacates DOL Fiduciary Rule

The Fifth Circuit Court of Appeals argues the Department of Labor lacked the statutory authority to promulgate the rule; a major victory for the brokerage industry.

wealthmanagement.com

Link to Trump’s deregulation of ‘fiduciary rule’ news to protect 401k retirement savings: dol fiduciary rule dead

The last straw was with the 2017 huge tax cuts for corporations and rich folks delivered to the rich GOP donors by President Trump, his administration and the GOP lawmakers in the US Congress that this country could ill afford. With a swish of an instant these GOP creators of the huge increase in the US deficit now estimated by CBO (Congressional Budget Office) to be over $2 trillion dollars over a decade, lost their conservative bonafides.

Remember how we were told about how many additional  jobs would be created as businesses would have extra monies, because of the huge 2017 tax cuts, to invest in expansion and other projects. Only this didn’t happen as most company executives decided to use these extra funds for stock buy backs.

Editorial cartoon on the Republican Party and tax cuts and the middle class

Those GOP lawmakers failed to explain to the majority of their constituents about how that $1.5 trillion dollar added to the US deficit to pay for the 2017 GOP tax cuts bill,  is a net amount. The actual numbers/ cost  for the uber rich 2017 GOP tax cuts equals about $6 trillion dollars in tax breaks over a 10 year time-frame. To pay for this $6 trillion dollar tax bonus for the rich, the GOP slipped into the budget, a tax increase of  a $4.5 trillion dollars to be levied slowly over 10 years on middle class/ poor folks. Then they added the $1.5 trillion dollars to the deficit over 10 years to reach that $6 trillion total dollar figure. The American taxpayers will be paying this bill.

PS. In 2017, the GOP senators had planned to use the savings incurred by their ending Obamacare instead of adding  $1.5 trillion dollars to the deficit over 10 years, but they were not able to kill Obamacare because of that one vote by the republican Senator John McCain.

 

John Darkow / Columbia Daily Tribune

Here is the rest of the story…

On February 3, 2019. David Leonhardt of the NY Times penned the following op-ed piece, “What’s Really Radical? Not Taxing the Rich”

Excerpts:

“Imagine for a moment that a presidential candidate made this speech:”

“My fellow Americans, I’m here today to tell you about my economic plan. Each year, I will require every middle-class family across this great country to write a check. We will then pool the money and distribute it to the richest Americans among us — the top 1 percent of earners, who, because of their talent, virtue and success, deserve even more money.”

“The exact size of the checks will depend on a family’s income, but a typical middle-class household will hand over $15,000 each year. This plan, I promise all of you, will create the greatest version of America that has ever existed.” (I had estimated $12,000 per HH.)

“You would consider that proposal pretty radical, wouldn’t you? Politically crazy. Destructive, even. Well, I’ve just described the actual changes in the American economy since the 1970s.”

Link to the entire opinion piece: nytimes.com

2 comments

  1. Good post. I’m happy to see that some of the early Democratic candidates are talking about economic inequality and proposing some fixes that clearly benefit the middle and lower classes. If we keep going in the direction we’ve been headed, this country will turn into a powder keg, even more than it already is.

    Liked by 1 person

  2. Dear TokyoSand,

    Like you, I’m thrilled that the conversation has shifted to recognize that something has to be done to lessen the huge income inequality that exists in the USA. That last tax break in 2017 that will end up costing American families anywhere from $12,000-15,000 USD per yr. is a tax increase on the middle class to pay for tax cuts for the wealthy, the same ones who’ve made out like bandits after the 2008 great recession that many of them helped create.

    Their greed and clueless attitudes as to how average Americans struggle, know no bounds. They’ve gone too far.

    Hugs, Gronda

    Like

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.