“Inequality, Dignity And Freedom”: People Least Inclined To Respect Efforts Of Ordinary Workers Are Winners Of The Wealth Lottery
Now that the Congressional Budget Office has explicitly denied saying that Obamacare destroys jobs, some (though by no means all) Republicans have stopped lying about that issue and turned to a different argument. O.K., they concede, any reduction in working hours because of health reform will be a voluntary choice by the workers themselves — but it’s still a bad thing because, as Representative Paul Ryan puts it, they’ll lose “the dignity of work.”
So let’s talk about what that means in 21st-century America.
It’s all very well to talk in the abstract about the dignity of work, but to suggest that workers can have equal dignity despite huge inequality in pay is just silly. In 2012, the top 40 hedge fund managers and traders were paid a combined $16.7 billion, equivalent to the wages of 400,000 ordinary workers. Given that kind of disparity, can anyone really believe in the equal dignity of work?
In fact, the people who seem least inclined to respect the efforts of ordinary workers are the winners of the wealth lottery. Over the past few months, we’ve been harangued by a procession of angry billionaires, furious that they’re not receiving the deference, the acknowledgment of their superiority, that they believe is their due. For example, last week the investor Sam Zell went on CNN Money to defend the 1 percent against “envy,” and he asserted that “the 1 percent work harder. The 1 percent are much bigger factors in all forms of our society.” Dignity for all!
And there’s another group that doesn’t respect workers: Republican politicians. In 2012, Representative Eric Cantor, the House majority leader, infamously marked Labor Day with a Twitter post celebrating … people who start their own businesses. Perhaps Mr. Cantor was chastened by the backlash to that post; at a recent G.O.P. retreat, he reportedly urged his colleagues to show some respect for Americans who don’t own businesses, who work for someone else. The clear implication was that they haven’t shown that kind of respect in the past.
On the whole, working Americans are better at appreciating their own worth than either the wealthy or conservative politicians are at showing them even minimal respect. Still, tens of millions of Americans know from experience that hard work isn’t enough to provide financial security or a decent education for their children, and many either couldn’t get health insurance or were desperately afraid of losing jobs that came with insurance until the Affordable Care Act kicked in last month. In the face of that kind of everyday struggle, talk about the dignity of work rings hollow.
So what would give working Americans more dignity in their lives, despite huge income disparities? How about assuring them that the essentials — health care, opportunity for their children, a minimal income — will be there even if their boss fires them or their jobs are shipped overseas?
Think about it: Has anything done as much to enhance the dignity of American seniors, to rescue them from the penury and dependence that were once so common among the elderly, as Social Security and Medicare? Inside the Beltway, fiscal scolds have turned “entitlements” into a bad word, but it’s precisely the fact that Americans are entitled to collect Social Security and be covered by Medicare, no questions asked, that makes these programs so empowering and liberating.
Conversely, the drive by conservatives to dismantle much of the social safety net, to replace it with minimal programs and private charity, is, in effect, an effort to strip away the dignity of lower-income workers.
And it’s something else: an assault on their freedom.
Modern American conservatives talk a lot about freedom, and deride liberals for advocating a “nanny state.” But when it comes to Americans down on their luck, conservatives become insultingly paternalistic, as comfortable congressmen lecture struggling families on the dignity of work. And they also become advocates of highly intrusive government. For example, House Republicans tried to introduce a provision into the farm bill that would have allowed states to mandate drug testing for food stamp recipients. (A commenter on my blog suggested mandatory drug tests for employees of too-big-to-fail financial institutions, which receive large implicit subsidies. Now that would really cause a panic.)
The truth is that if you really care about the dignity and freedom of American workers, you should favor more, not fewer, entitlements, a stronger, not weaker, social safety net.
And you should, in particular, support and celebrate health reform. Never mind all those claims that Obamacare is slavery; the reality is that the Affordable Care Act will empower millions of Americans, giving them exactly the kind of dignity and freedom politicians only pretend to love.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 13, 2014
“He’s No Aberration”: Tom Perkins Is Willing To Say What The Rest Of The Ultrarich Are Secretly Thinking
Tom Perkins incensed the Internet (again), when he suggested Thursday that only taxpayers should get the right to vote and that the wealthiest Americans who pay the most in taxes should get more votes. Yep, you read that right.
The sentiment is especially offensive when you consider the demographics associated with the statement (read: white and male), but it isn’t the most absurd thing he’s said. That would be a letter Perkins wrote to The Wall Street Journal on Jan. 24, in which he compared “the progressive war on the American 1 percent, namely the ‘rich’ ” to the persecution of Jews in Nazi Germany, particularly that the 1 percent face a “rising tide of hatred” akin to Kristallnacht, a series of coordinated attacks against Jews in 1938.
The strangest thing about the letter isn’t that he thought that or even admitted it in a paper of record. What boggles the mind is the outpouring of support he received from like-minded ultrarich Americans and conservatives.
Billionaire investor Sam Zell, appearing on Bloomberg TV recently, denounced what he termed “the politics of envy,” arguing the 1 percent have earned their position in society. “I guess my feeling is that [Perkins] is right: The 1 percent are being pummeled because it’s politically convenient to do so,” he said in an exchange with anchor Betty Liu. “The problem is that the world and this country should not talk about envy of the 1 percent. It should talk about emulating the 1 percent. The 1 percent work harder. The 1 percent are much bigger factors in all forms of our society.”
And The Wall Street Journal, a publication most beloved by the rich, similarly came to his defense. Anyone wondering whether the paper’s editors had printed Perkins’s letter to embarrass or expose him had their answer: They published it because they were sympathetic to the argument. Under the curious headline “Perkinsnacht,” the editorial board published an indictment of “liberals in power,” waxing dramatic about how “liberal vituperation makes our letter writer’s point.” The editors concluded: “The liberals aren’t encouraging violence, but they are promoting personal vilification and the abuse of government power to punish political opponents.”
Support for Perkins’s argument was so widespread that The Washington Post‘s Eugene Robinson wrote a piece questioning what exactly was making “some conservatives take a leave of their senses” in coming to Perkins’s defense. The best response to that question came (as usual) from New York Magazine‘s Jonathan Chait. “Perkins’s letter provided a peek into the fantasy world of the right-wing one percent, in which fantasies of an incipient Hitler-esque terror are just slightly beyond the norm.”
It wasn’t just the wealthy who came to Perkins’s side. One of the most cogent conservative arguments I read came from Michelle Malkin, who argued that it’s dangerous to marginalize a group, any group, even millionaires and billionaires. It was a good point, but it was something else in her piece that caught my attention. She called Perkins a “truth-teller” whose “message in defense of our nation’s achievers will transcend, inspire, embolden and prevail.” No matter, she lamented, “the mob is shooting the messenger anyway.”
That’s just it: Perkins isn’t an aberration, and his message is offensive precisely because it speaks to something a lot of rich people and conservatives actually believe. Perkins hadn’t gaffed. He hadn’t misspoken. Although he would later qualify his remarks, he was making a point that many of the uber-rich believe instinctively. They’re just too prudent to say so.
Perkins’s most recent statement—that people who pay more in taxes should get more votes—hasn’t had time to attract the kind of support his first one garnered, but it has parallels in Erick Erickson’s 53 percent movement. The RedState.org founder’s counterpunch to Occupy Wall Street’s “We are the 99 percent” slogan was meant to represent the 53 percent of Americans who pay federal income taxes. The assumption is that Occupy protesters are among the now famous (thanks, Mitt Romney!) 47 percent of the country who don’t.
The sentiment would resurface again on the presidential campaign trail when Romney said the thing that doomed his candicacy. A refresher: “There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe they are victims, who believe the government has a responsibility to take care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.”
Another thing Romney left off but might as well have said? Those who believe they are entitled to vote. Romney and Perkins have good reason to want to keep the 47 percent from voting. Namely, the 47 percent won’t make it a priority to protect the interests of the long-suffering 1 percent. They have more pressing concerns, like, say, groceries.
And that gets to another of Perkins’s fears: that the 1 percent is somehow endangered and at risk of “economic extinction.” To wit: “The fear is wealth tax, higher taxes, higher death taxes—just more taxes until there is no more 1 percent. And that will creep down to the 5 percent and then the 10 percent,” he said. It’s the irrationality of this fear that has garnered the bulk of media attention. But it’s also worth reflecting for a moment on just how poor Perkins’s conception of percentages is. (Pauses for dramatic effect. Moves on.)
There are a few other statistics Romney didn’t mention, such as that two-thirds of households that don’t pay federal income tax do pay payroll taxes. Or that 18 percent of all tax filers paid neither payroll nor income taxes. Of those who paid neither, nearly all of them were elderly or had incomes under $20,000.
Romney thought he was speaking in confidence, but Perkins isn’t worried about that. Perkins, as Malkin so deftly observed, is a truth-teller. He’s saying what the right-wing 1 percent truly believe but are too scared to admit publicly.
By: Lucia Graves, The National Journal, February 14, 2014
“Lifestyle Investments For The Rich And Famous”: When Charity Begins At Home, Particularly The Homes Of The Wealthy
It’s charity time, and not just because the holiday season reminds us to be charitable. As the tax year draws to a close, the charitable tax deduction beckons.
America’s wealthy are its largest beneficiaries. According to the Congressional Budget Office, $33 billion of last year’s $39 billion in total charitable deductions went to the richest 20 percent of Americans, of whom the richest 1 percent reaped the lion’s share.
The generosity of the super-rich is sometimes proffered as evidence they’re contributing as much to the nation’s well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again.
Undoubtedly, super-rich family foundations, such as the Bill and Melinda Gates Foundation, are doing a lot of good. Wealthy philanthropic giving is on the rise, paralleling the rise in super-rich giving that characterized the late nineteenth century, when magnates (some called them “robber barons”) like Andrew Carnegie and John D. Rockefeller established philanthropic institutions that survive today.
But a large portion of the charitable deductions now claimed by America’s wealthy are for donations to culture palaces – operas, art museums, symphonies, and theaters – where they spend their leisure time hobnobbing with other wealthy benefactors.
Another portion is for contributions to the elite prep schools and universities they once attended or want their children to attend. (Such institutions typically give preference in admissions, a kind of affirmative action, to applicants and “legacies” whose parents have been notably generous.)
Harvard, Yale, Princeton, and the rest of the Ivy League are worthy institutions, to be sure, but they’re not known for educating large numbers of poor young people. (The University of California at Berkeley, where I teach, has more poor students eligible for Pell Grants than the entire Ivy League put together.) And they’re less likely to graduate aspiring social workers and legal defense attorneys than aspiring investment bankers and corporate lawyers.
I’m all in favor of supporting fancy museums and elite schools, but face it: These aren’t really charities as most people understand the term. They’re often investments in the life-styles the wealthy already enjoy and want their children to have as well. Increasingly, being rich in America means not having to come across anyone who’s not.
They’re also investments in prestige – especially if they result in the family name engraved on a new wing of an art museum, symphony hall, or ivied dorm.
It’s their business how they donate their money, of course. But not entirely. As with all tax deductions, the government has to match the charitable deduction with additional tax revenues or spending cuts; otherwise, the budget deficit widens.
In economic terms, a tax deduction is exactly the same as government spending. Which means the government will, in effect, hand out $40 billion this year for “charity” that’s going largely to wealthy people who use much of it to enhance their lifestyles.
To put this in perspective, $40 billion is more than the federal government will spend this year on Temporary Assistance for Needy Families (what’s left of welfare), school lunches for poor kids, and Head Start, put together.
Which raises the question of what the adjective “charitable” should mean. I can see why a taxpayer’s contribution to, say, the Salvation Army should be eligible for a charitable tax deduction. But why, exactly, should a contribution to the Guggenheim Museum or to Harvard Business School?
A while ago, New York’s Lincoln Center held a fund-raising gala supported by the charitable contributions of hedge fund industry leaders, some of whom take home $1 billion a year. I may be missing something but this doesn’t strike me as charity, either. Poor New Yorkers rarely attend concerts at Lincoln Center.
What portion of charitable giving actually goes to the poor? The Washington Post’s Dylan Matthews looked into this, and the best he could come up with was a 2005 analysis by Google and Indiana University’s Center for Philanthropy showing that even under the most generous assumptions only about a third of “charitable” donations were targeted to helping the poor.
At a time in our nation’s history when the number of poor Americans continues to rise, when government doesn’t have the money to do what’s needed, and when America’s very rich are richer than ever, this doesn’t seem right.
If Congress ever gets around to revising the tax code, it might consider limiting the charitable deduction to real charities.
By: Robert Reich, The Robert Reich Blog, December 12, 2013
What’s The Deal With Mitt Romney’s Taxes?
So what’s the deal with Romney’s tax returns? Or more specifically, what’s the deal with Mitt Romney letting himself get more and more nippy press by refusing to release his tax returns when virtually every serious presidential candidate of the last 40 years has done it? Allow me to explain.
We already know Mitt Romney is a really, really wealthy guy. But there have been a lot of rich presidential candidates. And, though he was born to wealth, Romney also made a lot of money himself. He’s also said he’ll release information about his wealth, his assets … a lot of stuff. But just not the tax returns.
So what’s the deal? It’s pretty simple. We might say that a specter is haunting Mitt Romney — the specter of the Buffett Rule.
That’s right, we haven’t heard a lot about the so-called Buffett Rule in a while but it’s the concept pushed by kabillionaire Warren Buffett and embraced by Democrats and particularly the White House, which says that the superwealthy should not pay lower tax rates than your average secretary or auto mechanic or office manager or anybody else who gets by on a salary.
It’s a very resonant concept. It makes intuitive sense to people. Overwhelmingly the public supports the idea. And it’s very easy to understand.
This is Romney’s problem. While we don’t know the specifics of Romney’s tax returns, we know enough about his finances and sources of incomes to know that he is likely the poster-boy for the Buffett Rule. As Romney likes to say, he’s unemployed. He doesn’t draw a salary. But he seems to still be making big big money off capital gains which are currently taxed at a very low rate. He doesn’t seem to have drawn a salary at any time recently. So he likely pays no payroll taxes. And that’s before you get into legal but aggressive tax-sheltering. It seems virtually impossible that Mitt Romney doesn’t pay the sort of effective tax rate that would make people’s eyes pop when compared to middle income and even relatively wealthy (by normal standards) people who pay considerably higher rates.
That might cause a little problem in any election year. But issues of income inequality and particularly tax policy are right at the top of the political agenda in 2012. And that dictates keeping those tax returns under wraps as long as possible.
By: Josh Marshall, Talking Points Memo, December 30, 2011
Inconvenient Income Inequality
Is income inequality becoming the new global warming? In other words, is this another case where the facts of an existential threat lose traction among a weary American public as deniers attempt to reduce them to partisan opinions?
It’s beginning to seem so.
A Gallup poll released on Thursday found that, after rising rather steadily for the past two decades, the percentage of Americans who said that the country is divided into “haves” and “have-nots” took the largest drop since the question was asked.
This happened even as the percentage of Americans who grouped themselves under either label stayed relatively constant. Nearly 6 in 10 Americans still see themselves as the haves, while only about a third see themselves as the have-nots. The numbers have been in that range for a decade.
This is the new American delusion. The facts point to a very different reality.
An Associated Press report this week on census data found that “a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.” The report said that the data “depict a middle class that’s shrinking.”
An October report from the Congressional Budget Office found that, from 1979 to 2007, the average real after-tax household income for the 1 percent of the population with the highest incomes rose 275 percent. For the rest of the top 20 percent of earners, it rose 65 percent. But it rose just 18 percent for the bottom 20 percent.
And a report released in May by the Organization for Economic Cooperation and Development found that “the gap between rich and poor in O.E.C.D. countries has reached its highest level for over 30 years.” In the United States, the average income of the richest 10 percent of the population had risen to around 14 times that of the poorest 10 percent.
Our growing income inequality is a fact. So is the possibility that it could prove economically disastrous.
An April report from the International Monetary Fund found that growing income inequality has a negative effect on economic expansion. The report said that long periods of high growth, which were called “growth spells,” were “much more likely to end in countries with less equal income distributions. The effect is large.” It continued: “Inequality seemed to make a big difference almost no matter what other variables were in the model or exactly how we defined a ‘growth spell.’ ”
Our income inequality could jeopardize our recovery.
Yet another Gallup report issued Friday found that most Americans now say that the fact that some people in the U.S. are rich and others are poor does not represent a problem but is an acceptable part of our economic system.
If denial is a river, it runs through doomed societies.
By: Charlets Blow, Op-Ed Columnist, The New York Times, December 16, 2011
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