free market middle class wealthy redistribute

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income tax

The Middle Class In America Is Being Wiped Out

We've got to break out of the old ways of thinking about the economy. We excerpt four 2012/13 articles from: (1) Dollars and Sense, Nov/Dec, on free by M. Wolfson; (2) Truth, Jan 4, on shrinkage by Michael; (3) Associated Press, Jan 22, on Mickelson by Doug Ferguson; and (4) AlterNet, Jan 15, on civic profit by G. Alperovitz & S. Dubb.

by Marty Wolfson, by Michael, by Doug Ferguson, and by Gar Alperovitz & Steve Dubb

The privileged view has two main themes: 1) Because the U.S. "free market" rewards talent and hard work, the middle class should emulate the wealthy for their success, not vilify them; and 2) those who have been failures in the market want the government to take care of them by redistributing income from those who have been successful.

However, the right-wing objective has not been to create a free market; it has been to rig government policy and the market so as to redistribute income towards large corporations and the wealthy.

When the financial crisis of 2008 threatened the survival of the large banks, they were quick to ask for the government to intervene with a large bailout.

To read more

JJS: If the goal of government policy is to not trickle up but torrent up, then mission accomplished.

Our incomes are shrinking, our share of the income pie is at an all-time low, debt burdens have soared to unprecedented heights and millions of formerly middle class Americans have fallen into poverty.

Once upon a time, a college degree was just about a guaranteed ticket to the middle class, but in 2011 more than half of all college graduates under the age of 25 were either unemployed or underemployed.

If dramatic changes are not made, the middle class in America will continue to decline every year.

The following are 60 facts that prove that the middle class in America is being wiped out...

Median household income in the U.S. has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.

According to the Pew Research Center, 61 percent of all American households were "middle class" back in 1971. Today, that figure has fallen to 51 percent.

62 percent of all middle class Americans say that they have had to reduce household spending over the past year.

77 percent of all Americans are now living paycheck to paycheck at least part of the time.

In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.

While debt loads for middle class families are going up, the net worth of those same families is going down. According to the Federal Reserve, the median net worth of families in the United States declined "from $126,400 in 2007 to $77,300 in 2010".

There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.

Electricity bills in the U.S. have risen faster than the overall rate of inflation for five years in a row.

Health care costs accounted for 9.5% of all personal consumption in 1980. Today they account for approximately 16.3%.

46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

The 1% on average have 288 times the amount of wealth that the average middle class American family does.

The 1% have a greater net worth than the bottom 90 percent combined.

The 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

The bottom 50 percent of Americans collectively own just 2.5% of all the wealth in the United States.

Corporate profits as a percentage of GDP are at an all-time high. Meanwhile, wages as a percentage of GDP are near an all-time low.

To read more

JJS: The knee jerk reaction is to tax the rich, give to the poor, but does it work? It sure does annoy some who’ve been lucky.

Phil Mickelson is talking more about how much he pays in taxes than how many fairways he hits off the tee.

Mickelson, regarded as the "People's Choice" for his connection with fans, put his popularity on the line with comments about how much he has to pay in state and federal taxes.

The four-time major champion said it might lead to moving from his native California, and that it already caused him to pull out of the San Diego Padres' new ownership group.

Now he regrets not keeping his opinion to himself.

Mickelson said the new federal tax rate, and California voting for Proposition 30 to increase taxes on the earnings over $250,000, contributed to total taxes that tap into more than 60 percent of his income.

Golf Digest magazine, in its annual survey of top earners in the sports, said Mickelson made just over $45 million last year on and off the golf course.

Mickelson has earned just under $70 million in PGA Tour earnings for his career, which doesn't include corporate endorsements (Callaway, Barclays, Rolex) or his golf course design company, which is thriving in China.

To read more

JJS: The fact that someone has lots of money might not justify the state taking some of it away from him. If all that money was earned, then he got it from voluntary exchanges and nobody got hurt. It’s the income that’s not earned that presents a problem and should be the focus of reformers.

Further, a lot of rich people do give back some of their fortune and may do more good with their charity than government would do with the money.

And finally, the guy’s rich because golf is popular, and sports are popular for both healthy reasons and less healthy ones, such as the need to escape reality. If government did a better job of helping creating a context in which everyone could lead happy, productive lives, then athletes would be less adored -- and less the target of envious taxists.

So, if not taxing earning, then tax what? Anything? Or should government find other ways to raise revenue? Maybe perform services people would voluntary pay for? One thing politicians could do would be to recover common wealth for society.

By maintaining direct ownership of areas surrounding transit station exits, public agencies in Washington, DC, Atlanta and elsewhere earn millions, capturing the increased land values their transit investments create.

At some point, a society like the United States that already produces the equivalent of over $190,000 for every family of four must ask when enough is enough.

To read more

JJS: That point when to rethink just distribution must’ve already arrived long, long ago.

It’s not just land around transit stops but all surface land, not just land but all natural resources, and not just things like oil and spectrum but also ecosystem services, and it’s not just nature but privileges, too, such as corporate charters and many more. All the above are worth trillions in total. And all that wealth belongs to all of us equally. Sharing that social surplus is how to close the income gap, grow the middle class, and enjoy the means for living meaningful lives.

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Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

MLK, Celebrated Again, Ignored Again
http://www.progress.org/2011/lilohan.htm

Tax Dollars for Mitt Romney & a Film Pro-Smoking
http://www.progress.org/2012/smokings.htm

The 2012 Forbes 400 Richest List is Out
http://www.progress.org/2012/mplucas.htm

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