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Income inequality is not a disease, but rather a symptom of a disease. For over four decades, the United States has suffered from an atrophying of the great American middle class. The decline of post-World War II American economic dominance, the rise of new international competitors, the withering (and the smothering) of trade unions and accelerating globalization with its seamless transnational flow of capital, investment and automated production are among the factors which have choked off the supply of large numbers of good paying jobs for working Americans. If you have any doubt about America's painful transition from a manufacturing powerhouse to a lower-wage service economy, look no further than the top employers in 1955 (GM, U.S. Steel, General Electric, Chrysler and Standard Oil of New Jersey) and now (Walmart, IBM, UPS, Target, Kroger).

Yet for many conservatives, America's record-high level of income inequality is just natural. For the likes of David Brooks, Ari Fleischer, Kathleen Parker, Charles Murray and so many more, the growing chasm between the stratospheric rewards appropriated by a sliver of rich Americans and everyone else left in their dust is a simply a question of values. If only these Americans could overcome their sloth and moral degradation to rediscover the work ethic, traditional marriage and the nuclear family, they could share more of the bounty currently enjoyed by their "more deserving" betters. For the yawning income gap, the angry mobs of the supposed 21st century Kristallnacht have only themselves—or an act of God—to blame. It's no wonder a recent Pew survey found that half of Republicans believe the government should do little (15 percent) or nothing at all (33 percent) to alleviate it.

But income inequality isn't an act of God or the righteous workings of the invisible hand of the market. Much of the upward spiral in incomes of the top 10 percent of Americans since 1980 is the conscious result of three decades of government policy. The dramatic reduction in tax rates for the richest Americans, especially on their capital gains and dividends, has fueled the ever greater concentration of incomes and wealth. But the supply-side snake oil Republicans since Ronald Reagan have spoon-fed Americans did not work its magic: jobs, incomes and GDP grew faster when taxes were higher—even much higher. And while the gilded class has more than made up for its losses during the Great Recession that started in late 2007, workers' wages and incomes have continued to stagnate as American public sector spending at all levels of government contracted. Making matters worse, with Uncle Sam's outlays for non-defense, discretionary spending now at the smallest share of the U.S. economy in 50 years, America is not making the investments in education, R&D, infrastructure and the social safety needed for all Americans to compete and win in the global economy of the 21st century.

For most of the last century, the wages of American workers grew along with the economy's increases in productivity. But as the chart below starkly shows, since 1973 virtually all the gains from rising productivity went into the bank accounts of the richest Americans. "From 1973 to 2011, worker productivity grew 80 percent, while median hourly compensation, after inflation, grew by just one-eighth that amount," the New York Times reported in January, adding, "Since 2000, productivity has risen 23 percent while real hourly pay has essentially stagnated."

Continue reading below the break.

But not for the richest of Americans. It's not just because "the share of wages going to the top 1 percent climbed to 12.9 percent in 2010, from 7.3 percent in 1979." Something else—Ronald Reagan and the GOP's supply-side revolution—happened after 1979. With plummeting tax rates for their salaries and capital gains, the 1 percent began to rapidly pull away from everyone else.

As David Leonhardt documented in April 2012, effective tax rates for most Americans are lower now than in 1960. But for the stratospherically well-to-do, the tax cuts have been mind-boggling. The richest .01 percent saw their overall rate plummet from 71.4 to just 34.2 percent. The top tenth of one percent of American households reaped a windfall as their rates descended from 60 to 33.4 percent. The One Percenters enjoyed a drop from 44 to 30.4 percent. In comparison, those relative proletarians of the top 10 percent of income earners got only modest rate reduction to 27.4 percent from 28 percent. (Only with last year's fiscal cliff deal did the effective tax rate for the 1 percent return to its pre-Reagan level.)

How this all happened is no mystery. It wasn't just the massive Reagan tax cut in 1981 or the Bush tax cuts of 2001 and 2003. It was the dramatic reduction in capital gains tax rates that made the rich much richer and ensured their incomes from investments could grow ever higher. (That development was aided by the explosion in federal tax expenditures, the tax breaks, credits and loopholes which disproportionately aid the itemizing rich while costing Uncle Sam $1.3 trillion a year. It's no wonder Mitt Romney said that income inequality should only be discussed in "quiet rooms.")

In 2011, the Washington Post illustrated the dynamic at work:

As part of the Post's series on the widening chasm between the super-rich and everyone else titled "Breakaway Wealth," the Post concluded that "capital gains tax rates benefiting wealthy feed [the] growing gap between rich and poor." As the Post explained, for the very richest Americans the successive capital gains tax cuts from Presidents Clinton (from 28 to 20 percent) and Bush (from 20 to 15 percent) have been "better than any Christmas gift:"

While it's true that many middle-class Americans own stocks or bonds, they tend to stash them in tax-sheltered retirement accounts, where the capital gains rate does not apply. By contrast, the richest Americans reap huge benefits. Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.
(As University of California economist Emmanuel Saez showed in February, the rapid recovery and expansion of the stock market since the lows of the Great Recession allowed the top 1 percent to grow their incomes by 11 percent between 2009 and 2011, while the other 99 percent of American people continued to lose ground.)

Reviewing another study by Saez and co-author Thomas Piketty, Ezra Klein explained the central role of low capital gains taxes in "how the ultra-rich are pulling away from the 'merely' rich." As Klein noted, "If you don't look at capital gains, the top 0.01 percent only captures 3.15 percent of income in the United States," adding "that's about a third smaller a share as when capital gains are included." All told, the top 10 percent account for almost half of total income in the United States, up from just over 30 percent in 1970.

The impact of the nation's tax policies on income inequality has hardly been a secret on Capitol Hill. In December 2011, Thomas Hungerford of the Congressional Research Service (CRS) authored an analysis which concluded:

Capital gains and dividends were a larger share of total income in 2006 than in 1996 (especially for high-income taxpayers) and were more unequally distributed in 2006 than in 1996. Changes in capital gains and dividends were the largest contributor to the increase in the overall income inequality. Taxes were less progressive in 2006 than in 1996, and consequently, tax policy also contributed to the increase in income inequality between 1996 and 2006.
Last January, the CRS' Hungerford published another study which once again confirmed that historically low capital gains tax rates are "by far the largest contributor" to America's historically high income inequality. As ThinkProgress explained Hungerford's findings, the upward spiral of income inequality (as measured by the Gini coefficient) between 1991 and 2006 is mostly due to federal tax policy that slashed rates on capital gains and dividend income, income which flows almost exclusively to the rich:
By far, the largest contributor to this increase was changes in income from capital gains and dividends. Changes in wages had an equalizing effect over this period as did changes in taxes. Most of the equalizing effect of taxes took place after the 1993 tax hike; most of the equalizing effect, however, was reversed after the 2001 and 2003 Bush-era tax cuts. [...]

The large increase in the contribution of capital gains and dividends to the Gini coefficient, however, is due to the large increase in the share of after-tax income from capital gains and dividends, and to the increase in the correlation of this income source with after-tax income.

Now, these levels of income inequality not seen since the Great Depression might be more tolerable if they served to produce faster economic growth and accelerated job creation. But as Jared Bernstein along with Troy Kravitz and Len Burman of the Urban Institute have shown, lower capitals gains tax rates (contrary to the claims of conservative mythmakers) don't fuel increased investment in the America economy.

As Bernstein demonstrated with the chart above, there's no evidence to support the persistent GOP claim that a low tax rate on capital spurs more investment in the U.S. economy, and thus benefits all Americans. Bernstein found that that the business cycle, not acts of Congress, drives investment in the U.S.

Hard to see anything in the picture supporting the view that either the level or changes in cap gains taxes play a determinant role in investment decisions.

Remember, the ostensible reason for the favoritism in tax treatment here is to incentivize more investment and faster productivity growth. But that's not in the data and the reason it's not in the data is because investors aren't nearly as elastic to cap gains rates as their lobbyists say they are (more precisely, they'll carefully time their realizations to maximize their gains around rate changes, but that's not real economic activity-that's tax planning).

Reviewing other analyses in 2012, Brad Plumer of the Washington Post concurred with that assessment that low capital gains taxes don't necessarily jump-start investment in the economy:
The top tax rate on investment income has bounced up and down over the past 80 years—from as high as 39.9 percent in 1977 to just 15 percent today—yet investment just appears to grow with the cycle, seemingly unaffected. ...

Meanwhile, Troy Kravitz and Len Burman of the Urban Institute have shown that, over the past 50 years, there's no correlation between the top capital gains tax rate and U.S. economic growth—even if you allow for a lag of up to five years.

Billionaire Warren Buffett, the inspiration for the "Buffett Rule" advocated by President Obama and his Democratic allies, couldn't agree more. As he told the New York Times in 2011:
"I have worked with investors for 60 years and I have yet to see anyone—not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."
For years, Republicans have similarly claimed that higher marginal income tax rates would scare off the "job creators" House Speaker John Boehner once described as "the top one percent of wage earners in the United States ... the very people that we expect to reinvest in our economy." If so, those expectations were sadly unmet under George W. Bush. After all, the last time the top tax rate was 39.6 percent during the Clinton administration, the United States enjoyed rising incomes, 23 million new jobs and budget surpluses. Under Bush? Not so much.

That dismal performance prompted the Times' Leonhardt to ask in November 2010, "Why should we believe that extending the Bush tax cuts will provide a big lift to growth?" His answer was unambiguous:

Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7 ...

Is there good evidence the tax cuts persuaded more people to join the work force (because they would be able to keep more of their income)? Not really. The labor-force participation rate fell in the years after 2001 and has never again approached its record in the year 2000.

Is there evidence that the tax cuts led to a lot of entrepreneurship and innovation? Again, no. The rate at which start-up businesses created jobs fell during the past decade.

The data is clear: lower taxes for America's so-called job-creators don't mean either faster economic growth or more jobs for Americans.

The American experience since the Great Depression suggests that high income inequality does not correlate to faster economic growth. But as Jared Bernstein, Ezra Klein and Paul Krugman have been quick to explain, lower income inequality doesn't necessarily "cause" higher GDP. As Brad Plumer summed up a recent paper by Bernstein:

His conclusion: There are compelling reasons to believe that inequality can harm growth, but it's surprisingly difficult to prove this is happening...

In his paper, Bernstein ultimately concludes that there still "is not enough concrete proof to lead objective observers to unequivocally conclude that inequality has held back growth," although he also notes that much of the research is "relatively new"  --  and there's a lot more work that could be done.

To be sure, there's a lot to be done—now and in the future—to help working Americans and so reduce the gargantuan income gap. Those policy changes extend far beyond tax reforms to end the hemorrhaging which drains the U.S. Treasury in order to swell the coffers of the richest of the rich.

For starters, government at all levels should reverse the contraction of the public sector that has served as the "anti-stimulus" since 2008.

While the Obama stimulus program and minor increases in federal spending since he first took the oath of office boosted employment and economic growth, deep spending cuts by state and local governments more than offset those gains. In May, the Hamilton Project estimated that austerity at the state and local level cost the U.S. economy 2.2 million jobs. In April 2012, the Economic Policy Institute (EPI) explained why:

If public-sector employment had grown since June 2009 by the average amount it grew in the three previous recoveries (2.8 percent) instead of shrinking by 2.5 percent, there would be 1.2 million more public-sector jobs in the U.S. economy today. In addition, these extra public-sector jobs would have helped preserve about 500,000 private-sector jobs.
Counterproductive federal policy hardly ends there. Washington is struggling to extend unemployment benefits for 1.6 million jobless Americans even as the food stamp budget has been cut. The misguided focus on near-term deficit reductions means that Social Security and other federal social insurance programs could see further cuts. As it is, Dylan Matthews lamented, "The government is the only reason U.S. inequality is so high:"


Pre-tax/transfer inequality in the U.S., as the above chart by the Luxembourg Income Study's Janet Gornick shows, is about equal to that of Sweden, Norway, and Denmark. Finland, Germany, and Britain actually have higher pre-tax/transfer inequality than the U.S. does. The only reason these countries enjoy such low levels of inequality is that their tax and transfer systems reduce inequality much, much more than the U.S. system does.
Looking ahead, the United States must increase its investments in education, infrastructure and research and development to give American companies and their workers the best chance to compete and win in markets around the world. Yet with last year's sequester and the Ryan-Murray budget deal signed by President Obama, the federal government is going backward. As a percentage of the American economy, non-defense discretionary spending (that is, everything outside of defense, Medicare, Medicaid, Social Security and interest on the national debt) is on a downward spiral to the lowest level since the 1950s. (The Paul Ryan House GOP budget supported three years in a row by 95 percent of Congressional Republicans would slash it much further still.)

Ultimately, the gradual implosion of the middle class in today's winner-take-all global environment is putting our economy and democracy at risk. For millions of American families struggling to stay afloat and get ahead, the financial challenge is dire enough. In his controversial new book, Capital in the Twenty-First Century, University of Paris economist Thomas Piketty warns that the inevitable concentration of income and wealth is a threat to democracy itself. Alarmist or no, according to one recent study the top .01 percent of American earners provided 40 percent of all political contributions in the 2012 election cycle. And to be sure, their agenda—slashing federal spending, shredding the safety, opposing the minimum wage, undermining unions and deficit reduction above all else—could not be further from the rest of America's. It's no wonder that Pew Research found that fewer Americans believe that hard work leads to success or that they themselves are still members of the middle class.

They can be forgiven for feeling they got the short end of the stick or, perhaps more apt, the invisible finger of the market from the hand of their own government.

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Comment Preferences

  •  game time (8+ / 0-)

    Play the game of monopoly than one can understand how capitalism really works for the benefit of the few.

    Capitalism like communism and socialism is not about personal freedoms. anything but. the capitalists use their money to control gov, the courts, and the masses and of all  places the religious.

    It capitalism left untouched will create a society where the few have most of the wealth, spying on everyone, on going wars, most wealth spent on military for on going imperialism for profits, creation of corrupt and immoral gov, poverty, etc.

    Dutch Reagan understood this and sold Americans a bill of goods. they bought it hook line and sinker. ie still buying it.

    •  The important part of this is: (2+ / 0-)

      "the public bought it hook line and sinker. ie still buying it."

      We had a Democratic Senate and House from Jan 20th 2007, and until Jan 20th 2011. Yet the very first thing the majority Democratic Congress did was to re-write the postal rates to favor the Biggest Shippers and Suppliers, and charge more to the small business owners.

      Thirty damn years of collusion!

      Reagan had nothing at all to do with Obama's economic appointees. When you have a RICO criminal (That is, Tim Geithner)  setting up how the game is played at US Treasury for four or five years, when he should be wearing an orange prison suit, you know that it is all One Big Money Party.

      And like you say, people eat this shit up.

      •  Thank you Elise!!! (3+ / 0-)

        If you only read the Front Page and Obama apologists, we have only had GOP Presidents for three decades. Since 1980, the GOP has had the White House for 20 years; When BHO's term is up, we will have had it for 16 years.

        Reagan had a Dem House and Senate for the first two years. Please keep that mind. That's when the bulk of what we mostly dislike of his agenda was passed.

        Bush 41 had a Dem House and Senate all four years.

        Clinton had a Dem House and Senate for two years.

        Bush 43 had a split House and Senate for almost his entire term. Most importantly, he passed his tax cuts with Dem support.

        And of course, BHO had a Dem House and almost veto proof Senate the first two years.

        We have to hold out Dem Presidents accountable.
        Do Clinton and Obama share any of the blame for income inequality? And what about the citizenry?

        New Republic: So are the left-wing blogs as bad as the Tea Party ones in this case? -------------------------Chuck Schumer: Left-wing blogs are the mirror image. They just have less credibility and less clout.

        by AlexDrew on Sun Feb 02, 2014 at 06:25:25 PM PST

        [ Parent ]

    •  It's already there. (0+ / 0-)

      "It capitalism left untouched will create a society where the few have most of the wealth, spying on everyone, on going wars, most wealth spent on military for on going imperialism for profits, creation of corrupt and immoral gov, poverty, etc."

      "Onward through the fog!" - Oat Willie

      by rocksout on Sun Feb 02, 2014 at 07:37:15 PM PST

      [ Parent ]

  •  "atrophy" hardly describes diminution as a result (5+ / 0-)

    of ceaseless, relentless sledgehammer blows.

    To put the torture behind us is, inevitably, to put it in front of us.

    by UntimelyRippd on Sun Feb 02, 2014 at 02:15:30 PM PST

  •  Wonderful diary and analysis (5+ / 0-)

    I thoroughly enjoyed the read.

    Serious question. How do we repackage this into easy-to-swallow, bite-size morsels that most people can digest?

  •  Who Saved Country From "Envy" & "Class Struggle?" (4+ / 0-)

    Turns out these are favorite themes of Joseph Goebbels, Hermann Goering, and the Wall Street Journal.

    http://www.dailykos.com/...

    Men are so necessarily mad, that not to be mad would amount to another form of madness. -Pascal

    by bernardpliers on Sun Feb 02, 2014 at 02:22:21 PM PST

  •  A suggestion (5+ / 0-)

    Let's try something and call it "Fair Play Fair Pay"

    In any organization the highest compensation anyone can receive is 75 times the lowest compensation anyone receives.

    Would the wealthy squeal? Sure thing!
    Would they try anything to circumvent the law? You bet.
    Would it go a looooong way towards fixing the problem? Absolutely.

    Impossible? It will never happen? Maybe.

    But I can remember when black folks couldn't use the same drinking fountains as white folks.

    It starts with an idea that people think is right.

    •  And the country did this once before in the (3+ / 0-)

      '50's when the capital gains rate was 80-90%, forcing the big winners to avoid taxation by reinvesting in businesses thereby promoting growth.  Once they can put huge sums in foreign bank accounts, the money is hoarded and not kept within the economy.  The 1% are starving the nation of its money and then complaining when the Fed produced more of it under Bernanke.

      Building a better America with activism, cooperation, ingenuity and snacks.

      by judyms9 on Sun Feb 02, 2014 at 04:34:21 PM PST

      [ Parent ]

  •  Dexterity! The top 1% is putting its thumb on ... (5+ / 0-)

    ... the rest of us, while they give us the finger.

    More than half the members of Congress are millionaires. Most are not in that 1%, yet, but they wannabe.

    Rather than do battle with numbers and stats and require people to increase their attention spans, we should be able to distill from John's diary a ten second elevator speech that torpedoes the GOP's assertion that lower taxes create job growth.

    It would be the best form to be able to say, "They base it on XYZ, which has been proven wrong by ABC."

    It's intellectually honest, it rebuts them and it grabs the ball for us!

    2014 is HERE. Build up the Senate. Win back the House : 17 seats. Plus!

    by TRPChicago on Sun Feb 02, 2014 at 02:27:20 PM PST

  •  The invisible finger (7+ / 0-)

    is apparently the middle one.

    Only thing is, I can see it quite clearly as a person who isn't rich, powerful, and/or hooked up by virtue of my membership in the lucky sperm club.

    “Once is happenstance. Twice is coincidence. Three times is enemy action.” — Auric Goldfinger

    by LeftHandedMan on Sun Feb 02, 2014 at 02:53:15 PM PST

    •  Great minds. (Nt) (3+ / 0-)

      Hard to have a government when one-third of your representatives are insane and the other two-thirds have been sold to the highest bidder.

      by Rikon Snow on Sun Feb 02, 2014 at 02:57:10 PM PST

      [ Parent ]

    •  The more attention (3+ / 0-)
      Recommended by:
      AoT, thanatokephaloides, NoMoreLies

      how unfair the whole thing of it is, the more we get treated to Op/Eds comparing the inevitable populist backlash to whatever Godwin violation is the most hyperbolic.

      Rick Santelli on CNBC will soon gift us all with his paraphrased and personalized version of Steve Martin's "I was born a poor black child" narration from "The Jerk".

      "If you think about it, I am just like someone born a poor black child. Maybe moreso."

      The Estate Tax is just like Jim Crow... but for rich white people.

      Movement Conservative economics. Probably the only thing that is a greater epic fail than Movement Conservative foreign policy and domestic social policy.

      I'm so fucking sick and tired of getting lectured on the great equalizer that is free markets by pious millionaire spokesmodels. Spare me. Not when the people benefiting the most have all sorts of ways of nationalizing avoiding risk and loss and privatizing profit and gain.

      The National Review has more in common with an East German publishing collective than a product facing the judgement of a free market, but the bare minimum you can do to prevent people from starving in the richest nation on Earth is an outrage to these cretins.

       

      “Once is happenstance. Twice is coincidence. Three times is enemy action.” — Auric Goldfinger

      by LeftHandedMan on Sun Feb 02, 2014 at 03:06:35 PM PST

      [ Parent ]

  •  The invisible finger is the middle one. (Nt) (6+ / 0-)

    Hard to have a government when one-third of your representatives are insane and the other two-thirds have been sold to the highest bidder.

    by Rikon Snow on Sun Feb 02, 2014 at 02:54:39 PM PST

  •  Leonhardt's writing on effective tax rates (0+ / 0-)

    was brief and incomplete (as is the nature of any discussion of taxation that begins and ends with rates--marginal and effective).  What matters most are receipts, and you'll note that even in the 1950s the 1% weren't paying as much as they are today.  At least not until they were dead.  The principle instrument for tax fairness were estate and corporate taxes, which have declined significantly since 1960, but even then tax policy greatly favored investment over wage.  That's never changed; in fact, it's pretty much the same pattern in every other industrialized nation.  Simply comparing income inequality between the US and Sweden may make for some second takes, but that's a difference in degree rather than kind.  Both countries saw massive explosions of wealth in the past forty or so years.  The bulk of those benefits have always gone towards a minority of the population.  Sweden gets points for less income inequality, but it's a difference of degree rather than kind when you're talking about the top 20 percent taking half or 35%.  Sweden, on the other hand, takes far better care of its below median earners than the US, and therein lies a critical difference.

    On the other hand, at some point we have to address an even more fundamental problem.  What is it about economic activity that makes the bulk of generated income exploitable by so few people?

    •  But at the time, the lower middle class wasn't (3+ / 0-)

      expected to make yup the difference. Now they are.

      My dad barely made anymoney from 1949 to 1955. I mean, how could he support a fam,ily of three,a nd then four, on the little he made?

      But rent money was a mere $ 90 a month, and in a totally safe area, with big trees at the windows and parks all around.  I remember at age five walking down the alley to get bread, hamburger, jar of condiments, and sodas for less than $ 3.00

      My dad always had $ 1,000 in savings. Basically that was 20% of his yearly income. But not only were the above realities, consider this:  the tax code, which allowed
      him $ 1,200 a year for his spouse and self, and another $ 600 a piece for us two kids, meant he paid little in taxes.

      Now to accomplish what he accomplished,  ahead of household  would need at least $ 70,000. And taxes on that $ 70,000 are going to be around 21% at least of your income. Unless you can also qualify for a mortgage deduction, which in many areas of the country, people making $ 70,000 a year cannot do.

      •  Exactly (1+ / 0-)
        Recommended by:
        JerryNA

        The key is to get people to understand that we are not talking about them.

        The problem, like you say, is that a middle class life today is something that only becomes affordable in the 20th percentile. So people that are making it, but just barely, think that when we say "tax the rich" we're talking about them.

        We're not. As these graphs show, we don't even need to focus on the 1% - we can work on the 0.1% and still make a huge difference.

        So we're talking about the size of Hoboken (to use a newsworthy example) out of the entire country. Too many people in the 20th percentile think they're rich. We need to make it clear that it's not you, that you will benefit along with the rest of us.

        "Mediocrity cannot know excellence." -- Sherlock Holmes

        by La Gitane on Sun Feb 02, 2014 at 11:39:10 PM PST

        [ Parent ]

  •   withering of trade unions is a symptom, (3+ / 0-)

    not a cause...

    Globalization has destroyed the very jobs where unionization made sense - manufacturing.

    And I do have a one major quibble with your analysis.

    Why do you think higher taxes on cap gains would raise the income level of the lower income earners?

    We're in a deficit situation for many years now.  A return to Reagan era taxes would indeed lower the top earners and reduce inequality (good!), but those taxes would be used to balance the budget (good again!), not necessarily go to new programs for low income workers.

    The only thing that will permanently (as much as anything is permanent) raise the standards of workers is bringing more good private sector jobs back to our shores.  When Employers have to compete for labor, wages go up.

    So, yes.. increase taxes, especially on cap gains, but find other ways to encourage investments in private sector jobs here in America, even some protectionism.

    •  Sure, I'll take that. (2+ / 0-)
      Recommended by:
      thanatokephaloides, NoMoreLies
      Why do you think higher taxes on cap gains would raise the income level of the lower income earners?
      Capital gains don't come from manufacturing. Taxes for manufacturing profits are higher than taxes for gambling on Wall St. So what mega rich person would invest in manufacturing? Remember that manufacturing is the major factor in good paying middle class jobs

      That's why Wall St. and the trade deals are destroying the American economy.

      A true craftsman will meticulously construct the apparatus of his own demise.

      by onionjim on Sun Feb 02, 2014 at 03:13:39 PM PST

      [ Parent ]

    •  Taft-Hartley started this (1+ / 0-)
      Recommended by:
      thanatokephaloides

      Unions built the middle class and the destruction of union power, beginning with Taft-Hartley, was what destroyed our economy. When the people have economic power then people in general will prosper. Repeal Taft-Hartley now and we'll see an improvement. Make sympathy strikes legal at the very least.

      If knowledge is power and power corrupts, does that mean that knowledge corrupts?

      by AoT on Sun Feb 02, 2014 at 03:58:03 PM PST

      [ Parent ]

    •  raise living standards of workers (1+ / 0-)
      Recommended by:
      JerryNA
      The only thing that will permanently (as much as anything is permanent) raise the standards of workers is bringing more good private sector jobs back to our shores.
      Which do not require bankruptcy-level indebtedness for the worker to obtain them.
      When Employers have to compete for labor, wages go up.
      And laborers are fully employed, and therefore both save and spend.
      So, yes.. increase taxes, especially on cap gains, but find other ways to encourage investments in private sector jobs here in America, even some protectionism.
      Spot on! If you work for wages, unrestricted "free trade" is economic rape. The banksters, Wall Street, and Big Capital make out like the criminals they are while our jobs go away.

      "It's high time (and then some) that we put an end to the exceptionalistic nonsense floating around in our culture and face the fact that either the economy works for all, or it doesn't work AT all." -- Sean McCullough (DailyKos user thanatokephaloides)

      by thanatokephaloides on Sun Feb 02, 2014 at 07:48:48 PM PST

      [ Parent ]

  •  Don't expect the wealthy to admit it. (1+ / 0-)
    Recommended by:
    thanatokephaloides

    At this point its duck and cover. They have run out of excuses for not sharing. They are just greedy little shits, and need a trip out to the woodshed.

    A true craftsman will meticulously construct the apparatus of his own demise.

    by onionjim on Sun Feb 02, 2014 at 03:05:41 PM PST

  •  I am curious why tax rates are blamed... (2+ / 0-)
    Recommended by:
    myrmecia gulosa, AlexDrew

    ...so much when outsourcing and automation are far more to blame for the demise of the "middle class".

    For example, productivity isn't increasing because of some increase in worker skills or education. Productivity is increasing because of deskilling and automation. What used to take several skilled or semi-skilled workers now just takes one unskilled worker to push a button and wait for the machine to finish. Proportional increases in highly skilled programming and design positions continue to increase inequality.

    You can rage against the dying of the light by tinkering with tax rates, but you can't fight the machines.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Sun Feb 02, 2014 at 03:08:59 PM PST

  •  This is a very good piece (3+ / 0-)

    Thank you for putting it together.

    If anyone is curious where their income places them, or if anyone is curious what "1%" or "10%" top incomes are where they live, this interactive income map from the NY Times is helpful.

  •  Great writing very thorough diary (2+ / 0-)

    -1.63/ -1.49 "Speaking truth to power" (with snark of course)! Follow on Twitter @dopper0189

    by dopper0189 on Sun Feb 02, 2014 at 03:21:02 PM PST

  •  There Hasn't Been a Party Favoring Reversing (4+ / 0-)

    these conditions for 40 years. These economics began albeit slowly in the 1970's.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sun Feb 02, 2014 at 03:45:09 PM PST

  •  Mao Tse Bloomberg (1+ / 0-)
    Recommended by:
    thanatokephaloides

    One of the more popular billionaire liberals fighting the good fight to control, change or outright destroy human nature famously said last October that he was PROUD New York City was unaffordable. It means people want to live there.  We need more of that kind of thinking. The Ruling Class must Rule - return to your workbench, citizens!

  •  If anything, it seems that lower income and (2+ / 0-)
    Recommended by:
    thanatokephaloides, NoMoreLies

    capital gains rates correlate with a sluggish economy.

    There is no existence without doubt.

    by Mark Lippman on Sun Feb 02, 2014 at 04:33:53 PM PST

  •  I'll say it again; (2+ / 0-)
    Recommended by:
    thanatokephaloides, JerryNA

    Free markets, tight regulation. And no buying elections by companies - or anyone else for that matter.

    I ride the wild horse .

    by BelgianBastard on Sun Feb 02, 2014 at 06:36:50 PM PST

  •  Policies that raised inequality the natural result (1+ / 0-)
    Recommended by:
    JerryNA

    of having self-interested politicians and corrupt legislators, bought and paid for by the wealthiest power brokers in America over the past 33 years.  Meanwhile, on the worker side of the equation, labor unions and collective bargaining have been smashed, while global cheap alternative labor markets opened up to multinational corporations, ruining average worker's pay/benefits and shrinking the supply of available jobs in the USA.

    This epic economic power shift, away from labor and toward capital (and their capitalist owners and investors) has been a 30-year class war, waged and won by the elites.  Will American workers ever wake up, and will there ever be Hell to pay?  In the Corrupt Corporate States of America (CCSA for short), I have my doubts.

  •  ECONOMIC OBSERVATONS (1+ / 0-)
    Recommended by:
    JerryNA

     
    FIRST OBSERVATION:  Money, wealth, capital, assets, etc. can be created and destroyed
    SECOND OBSERVATION:  Money, wealth, capital, assets, etc. are only useful when it is creating something useful to or for society, the nation or a culture.
    THIRD OBSERVATION:  As wealth is taken out of a society and made unavailable through gambling, speculation or other means social disorder increases.
    FORTH OBSERVATION:  Money, wealth, capital, assets, etc flows upward and if not stirred becomes stagnant.
    FIFTH OBSERVATION:  When consumption increases, employment increases, and visa- versa.
    SIXTH OBSERVATION:  No correlation exists between a low income rate for high income citizens and an increase performance in the national economy.
    SEVENTH OBSERVATION: The invisible hand has a thumb on the scale causing free enterprise and markets to favor the most powerful within any society.
    EIGHTH OBSERVATION: Only government can remove the thumb by using laws, rules and regulations and the strong, sure, even and fair enforcement thereof.

  •  This is all deja vu (2+ / 0-)
    Recommended by:
    offgrid, JerryNA

    Same thing was happening during The Gilded Age. The Robber Barons looting America's wealth unhindered, capitalism running amok and becoming cancerous to a healthy middle class and America itself.

    The irony? It was the last good Republican - Teddy Roosevelt - who recognized its supreme danger and corrected it, as is periodically necessary in order to control capitalism when it begins to over-metastasize.

    And that, boys and girls, is why Teddy Roosevelt's nickname was "Trust-Buster".

    "Do you realize that fluoridation is the most monstrously conceived and dangerous Communist plot we have ever had to face?" - General Jack D. Ripper

    by wilder5121 on Mon Feb 03, 2014 at 07:22:46 AM PST

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