Inequality and What can be Done

Inequality and What to do About It

drbob232@gmail.com

Income

0 10 20 30 40 50 60 70 80 90 1000

10000

20000

30000

40000

50000

60000

70000

80000

90000

Income Level Versus % of Population-2007

Percent of Population

Inco

me

Leve

l

Income Growth 1979 to 2007

Wages Flat

Wages as % of Economy

Corporate Profits Risen Exponentially

Income Inequality Index , by Country

GINI =0, full equality; 1.0, full inequality

Worldwide Poverty Levels

70% of all income

6%of all income

12% of all income

6%of all income

Conclusions on Income• Income Distribution Counter to a Free

Enterprise, Democratic Society• Stifles Domestic Economic Growth -Top 1% Earn the Same as Bottom 55% -2/3 of Population with less than $45,000

Income - Little for New Spending To Spur Growth• The $ Resources to Fix the Economy Are

with the 1% and large Corporations

Income Share vs. Federal Income Tax Share

Top 0.1% Top 1% Between 1 &5% Between 5% & 10% Between 10% & 25% Between 25% & 50% Bottom 50%0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

Income ShareFederal Income Tax Share

Taxes

Includes payroll taxes

Regressive Effect of

Total = federal ,state, and local taxes.

Total = Federal, state, and local taxes

Percent of Income Paid for All Taxes

Payroll, Real Estate and Sales Taxes Make Total Tax Rates Similar for Middle Class and Wealthy

Conclusions on Taxes

• Federal Income Tax Alone Still Somewhat Progressive –But Not Enough

• Regressive(same % for all income levels) payroll, sales, and real estate taxes create similar overall rates for the Middle Class and the Wealthy.

• Need to Address all taxation areas.

Wealth

Greater Equality-Economic

• Grow Economy /Restore 17 million Jobs• Distributed Benefit

How Do You Create 17 Million Jobs?

• Costs About $1.5 Trillion ($1500 billion) A Year• Who Has That? -Government; $200 billion a year would be a feat - Large Corporations; Holding 1.8T, Earning 1.5T

a Year( after taxes) - Wealthiest 1%; Earning $1.0 T a year(after

taxes)

How to Move the $ to a U.S. Worker

• Tax Breaks for Wealthy Hasn’t Worked• Tax the Wealthy, Govt. Pays the

Employee - Ok for Public Services - But for rest, not efficient; $ In from

private sector, thru government, backout to private sector.

- Most Job Loss in Private Sector

Getting the $ to a U.S. Worker

The Key: Get Corporations, 1% to Spend on U.S. Job Creating Activities

• Increase Tax Rates but Allow Lower Rates for U.S. Job Investment.

-Credit for demand side- wages, profit sharing, child care, worker education

-Credit for supply side- plant investment, hires

• End Tax Breaks for Facility/Job Outsourcing - Tax Income as Earned , not when “returned “ to U.S. - Limit Foreign Tax Credit; Remove U.S. Sales Income from

Calculation -Offshore Tax Haven Abuse; $100 Billion/Year

Grow Economy

• American Jobs Act-near term• Change Corporate, Upper End Tax Rates to Spur • U.S. Job Investment• Long Term Infrastructure Work; Derivatives Tax• Change Anti-Competitive Laws and Regulations• Improve Education: public school capability and

funding methods, preschool, community colleges, college loans, grants

• Research and Planning

With Distributed Benefit

• Increase Upper End Taxes (Income, Capital Gains, Estate)

• Low Rates for U.S Job Creating Investments• Use $ to shore up Safety Nets.• Address Regressive Real Estate and Sales Taxes• Progressive Wealth Tax - Beyond Real Estate• State Income Taxes vs. Sales, Property Taxes

Distributed Benefit ,con’d

• Positive Union Approach• Change Home Mortgage Formula(earlier

loan principal payoff)• Less reliance on Real Estate Tax for School

Funding• Address Excessive health care charges-price

and method• Others?

Restoring Equality-Politically

Equality of Voting and Influence- Review of Voter/Voting Impediments ---Registration ---National Holiday ---Extend Early Voting- Limits on Private Campaign Contributions; Override Citizens United Case- Term Limits; Supreme Court, Congress

Political Equality-con’d

- Post-Election Term Employment Restrictions- Lobbying Transparency- Mass Media Reforms; Free Election Campaign

Air Time, Fairness Doctrine, One Station for Free Public Air Time

- Independent State Commissions for Defining Congressional Districts

- Others?

Conclusions• Inequality Contributing to Economic

stagnation-Demand• Political Influence Inequality Has kept Status

Quo• No single answer to Job Creation and

Reducing Inequality • Many Initiatives/projects to Do