Feeding the Wealth Accumulators

Mr. Romney said he did not word it well when he said that the 47% of Americans pay no taxes and that this group is totally dependent on government for about everything and that he really cannot worry too much about trying to get their vote because it is hopeless—they will vote for the person handing out freebies.

 

This morning, Neal Boortz said that in 1994, 24% of Americans paid no income tax and 47% did not pay income tax in 2010. He suggested that this indicates how successful the Democrats have been in making people dependent on government and that they should not be upset with Romney for pointing out their success.

 

There is another possibility.

 

But first, social security: in 1994, about 15% of Americans were drawing Social Security retirement benefits, now that percentage is over 18%. While many of these retirees pay income taxes because of other income sources, an estimate of retirees actually paying income taxes might be about a third. That leaves us with 10% and 12% of those not paying income taxes being recipients of social security.

 

Carry the one and. . . in 1994, 14% of non-retired people did not pay income taxes; now that is 35%.

 

This is not success on the part of Democrats, but on the part of the wealth-accumulators—whom the Republicans call Job Creators.

 

The reason the Republicans should take credit for this is the disparities in income and wealth  now present in this country.

 

As can be seen in the pie chart, since 1979, 59.9% of income gains have gone to the top 1% and an amazing 91.4% have gone to the top 10%.:

 

 

 

 

 

 

 

 

 

 

 

 

The following chart depicts the increases in income by segments of the population over time:

 

 

 

 

 

 

 

 

 

We now have a situation where the top 400 people in America make more than the bottom 150 million.

 

There is a measure of income inequality distribution, referred to as the Gini co-efficient (named after the sociologist who developed it). In the 60’s and 70’s, the US was in the middle of the pack on this, along with most the rest of the world, while Mexico and Brazil were leaders in the inequality of income – where only a very few have most of the wealth and income in a country. Sometime after Gecko, the US left the pack and became more or less equal with Mexico. Brazil of rocketing out of sight and it will take some real work to catch them.  See the chart below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The answer is not to continue to stuff the pockets of the Wealth Accumulators in the hope that something will magically trickle down.  Reagan started with the “trickle-down economics.” When that didn’t do what they lied to us about, it was changed to “Supply side,” the same wolf in different clothing.  The Republicans are still at it because it works: it helps those at the top accumulate wealth and income at the expense of the bottom 90% – 95%.

 

President Obama has referred to it as “Fairy Dust” economics because it is about that real for most of us.  But the term “Voodoo economics” is more descriptive because it works like a spell, causing money to filter its way to the top.

 

 

 

Comparing 1994 to 2010

 

This success of the Republicans has decimated the middle class.  The median family income in 1994 was about $31,000; now it is $49,000, which has just about kept up with inflation.

 

The median cost of a home in 1994 was about $124,000, or four times the median income; now it is $240,000, almost 5 times the median income… It is much harder for the typical American to buy a home.

 

Tuition: in 1981, my last semester at the University of Arkansas cost $300 in tuition, $600 a year.  Now the cost is $7,174 according to their web page. In 1981, this was about 2% of median family income; now it is about 15%. Harder to get an education now and education is the single greatest thing someone can do to see economic benefits.

 

I do not even want to discuss what health care costs have done to the typical family except to say they have risen so fast that a significant number no longer have health insurance. I wonder if there is a correlation between these people and those who do not pay taxes?

 

 

 

Summary

 

Simply put: Romney doesn’t get it.

 

We do not need more tax breaks for the top wealth accumulators, we do not need more trickle down because it does not trickle. We need to do whatever is necessary to raise the middle class back to where it was before all the Voodoo started, when we were in the middle of the pack on income disparity, not trying to pass Mexico and Brazil.

 

Some call me a socialist; others ask how much is enough to take from the Wealth Accumulators?  I think Warren Buffet said it best: he is for the tas policy that generates about 21% of GDP in taxes.

 

I am not sure President Obama truly gets it either, but he is willing t o listen and I think he can understand, or remember.

 

The difference in Republicans and Democrats is that the rich Democrats remember from whence they came.

Sources for charts:

Pie chart http://www.epi.org/publication/fifths-income-growth-1979-2007-top-1/

Income disparity http://currydemocrats.org/in_perspective/income_distribution_over_time.jpg

GINI Coefficient http://en.wikipedia.org/wiki/Gini_coefficient

TH monopolyman is from http://4.bp.blogspot.com/-5Xdpvuzlf8U/TkmdcsSZwwI/AAAAAAAAACM/9Bz5MrcfZbA/s1600/MonopolyManMoneybag+6.jpg

 

 

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