The Congressional Budget Office (CBO) released a study that compared real after-tax household income between 1979 and 2007, which were both after recessions and had similar overall economic activity. The income of the richest 1 percent in the U.S. soared 275 percent. Middle-income households saw a 40 percent rise. For those at the bottom of the economic scale, the jump was 18 percent.
Obama announced, in his weekly radio and Internet address, that he would pay for his jobs plan with an additional tax on the top investors in our economy.
Senate Republicans have blocked action on the bill, which mixes tax breaks for businesses and public works spending, because they oppose a continuance of the same approach that, up to now, has failed to create any positive change in the unemployment rate.
Republicans, while in favor of many of the components of the "jobs plan" in the past, refuse to support the idea of funding any portion of the plan with additional taxes on those who, throughout the history of the capitalist system, have provided the capital required for private sector job creation.
"Taxing the job creators to fund business tax breaks makes little sense, and would provide little help for our economy. It’s much like raising the price on fuel and redistributing some of that money for tune-ups. It’s a negative at one end, and a positive at the other, getting us no further down the road"
The congressional income disparity report, based on Internal Revenue Service and Census Bureau data, was released as the "Occupy Wall Street" socialist movement protests bailouts for corporations and that very same income gap.
Now, I understand the politics of defending the rich is suicidal. And, understanding the ignorance of the average occupier, toward the most basic understanding of economics and capitalism. Someone, somewhere, needs to get it through their liberal minds that investment is the life-blood of our economy. It is, and has always been, the people of means that fund job creation and economic growth. It is, and rightly should be, those same people who profit from it. You are living a pipe dream if you think an investor would provide capital to a system that would confiscate and redistribute the proceeds of it.
The socio-economic ladder has not just grown wider with population growth, and higher from economic growth, but each rung of that ladder has grown in distance from the others. Sure, it can be said that the majority of the growth has proportionally been distributed among the wealthy, and rightfully so. But how could you expect the salary income of an unskilled laborer to grow in value. To be blunt, with the number of unskilled labor workers growing every day, while at the same time the need for unskilled labor decreasing, they are lucky to have job at all, let alone have a wage that can keep up with inflation.
"If you visualize the socio-economic ladder as an actual ladder. The rung closest to the ground, is always going to be so. When economic growth lengthens that ladder, since the ground is still the ground, the ladder can only extend higher at the top."
Now don’t get me wrong, I don’t have anything against the average man, hell I am one. But, I’m not foolish enough to expect any part of the proceeds from economic growth. Other than my modest contributions to an investment portfolio, I’ve done nothing to deserve any part of those proceeds. I get paid the worth of my labor, plus regular pay increases equal to the increases in the costs of living. I have had a number of promotions that have inched me up the socio-economic ladder every few years, and have received yearly performance-based bonuses when productivity exceeds projections. I pretty much get what I deserve, and nothing more. If I felt I was not compensated properly, I would either improve myself as an employee, or look elsewhere for an employer that is willing to hire me at the wage more in-line with my skill set and perceived worth.
Occupiers can bitch and moan the whole year through that income disparities are getting larger, but they cannot show that to be a bad thing. In fact, income disparities are both caused by, and are a direct result of, economic growth from capital investment. Who in their right mind is against a healthy, growing economy? In a free market economy, everyone who is employable by the economy, is paid exactly what they are worth to the economy. If the occupiers are whining that their not getting the proceeds of economic growth, they’ll need to participate on the investment side of things. The rich have provided the economy we have, they have not taken income from you, but rather created the means for you to have employment income in the first place.
O.K. that said, the occupying force on Wall Street does have some legitimate gripes. Nobody liked the bank bailout! Even though the TARP program was extremely unpopular in nearly all segments of society, it was necessary, it was effective, and it was paid back. I am not endorsing that kind of governmental bailout ever be enacted again, but in a time of projected economic doom, there is an exception to every rule.
Crony capitalism has been pretty popular occupier term of late, in which success in business depends on close relationships between business people and government officials. It is exhibited by favoritism in the distribution of legal permits, government grants, contracts, special tax breaks, and so forth.
Crony capitalism arises when political cronyism spills over into the business world; self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals.
The occupiers only enforce my belief that government should, for the most part, remove itself from the private sector economy as much as possible. Over-regulation, taxes, subsidies, everything must go! Governmental regulations are a necessity, sure, but they need to be limited to health and safety of products and workplaces. You will never eliminate all risk, nor should you try, but there are obvious regulations supported by all. The low-percentage hazards need to be ignored. Any company found to be lacking in product or workplace safety, though not in violation of governmental regulations, will either be judged in the courts, or the court of public opinion.(remember the Yugo) Businesses don’t really pay taxes, they just pass it down to their customers, so why not just cut out the middle-man. Subsidies come from government corruption and politics that distort and confuse the free market to favor American products. I’m in favor of making American products more globally competitive, but through tax elimination for all, not cash handouts to the few.
In an attempt to bottom line this article. I guess I’m trying to express that people need to wise up and learn the basics of economics. I understand the anger caused by high unemployment, but believe directing that anger at job creators is misguided and ignorant. I get the point that government manipulation has improperly aided big business, at possible expense to our economy, and I call for this to end. I actually see the occupiers and the tea party sharing common ground on this issue, although I doubt they would address it in the same manner. I see the occupiers as retro-hippie morons with few issues that they, themselves, are not personally responsible. While at the same time I feel that "ignorance and want" are the direct result of poorly implemented government social and economic policies.
The cure for this, of course, is to sever the ties between government and the business sector. If businesses were immune to tax policy, their would be little need for the government-corrupting tax lobbyists. Anything that could even be perceived as favoring one business or business sector over another; corporate welfare, subsidies, etc., need to be ended. Tax policy needs to adjust for the loss of business tax revenue, and this should be accomplished through the implementation of a consumption tax that is placed upon imports, but immune to exports. This would allow American businesses to become more competitive in the global market place, and become more able to employ the unskilled labor workers that our economy has currently been unable to accommodate.