Exploring economic inequality - Advocating for the bottom 50%
Where's Social Security?
Karl Polzer, Center on Capital & Social Equity
A government, already paying interest on more than its people produce each year (hint: $22 trillion), now proposes to tax its wealthiest citizens in the vicinity of $3 trillion more to finance a growing list of social and physical infrastructure needs. Like families paying off mortgages, indebted governments should know that each major purchase narrows its ability to raise capital for future needs...
So, what do we need and how can the wealthy be tapped to pay for it? What's missing?...
"His estimate goes far beyond the official $441 billion difference between taxes paid and taxes owed annually, the so-called tax gap, reported by the IRS."
More than enough to make Social Security solvent without benefits cuts. (Possibly enough for Congress to pay for a good share of infrastructure spending on paper.)
Dear infrastructure financiers: Tolled express lanes benefit high-income drivers the most and cost low-paid commuters relatively more. They should be financed by progressive income or wealth taxes. A dedicated surtax on higher-priced new cars?
"While some argue tolling is regressive, it is actually less regressive than most other transportation taxes and fees. The sales tax, for example, which is used to fund roadways and mass transit in some states, is the most regressive way to fund transportation. Tolls can also be less regressive than the gas tax, particularly for low-income drivers with older, less fuel-efficient vehicles."
How the American Rescue Plan Will Improve Affordability of Private Health Coverage - Karen Pollitz/KFF
"Under ARP, ACA marketplace premium subsidies are substantially enhanced for people at every income level and, for the first time, offered to those with income above 4 times the federal poverty level.
"People up to 150% FPL can now get silver plans for zero premium with vastly reduced deductibles."
“We are not saying that the degree of discrimination that a Palestinian has to endure is the same if one is a citizen of the state of Israel or if one is besieged in Gaza,” El-Ad said. “The point is that there isn’t a single square inch between the river and the sea in which a Palestinian and a Jew are equal.”
The U.S. should provide no more funds to the Israeli government until all people under its control are treated equally.
Palestinian short film 'The Present' wins Bafta: 'I dedicate this award to the people of Palestine' - Sophie Prideaux/The National
"The film, co-written by Palestinian filmmaker and poet Hind Shoufani, was shot over six days in the Palestinian territories.
"...(Director Farah) Nabulsi said that, to her, the film is about 'human dignity and the importance of dignity and what it means for someone to continuously be dehumanised'.
“It’s a simple story that speaks volumes about the absurd situation that exists there [in Palestine].”
"As job growth finally starts to take off thanks to improving vaccine numbers and increasing optimism, the economy is confronting an unusual quandary: a mismatch of expectations between workers and employers that's becoming a standoff.
"Why it matters: The jobs growth bonanza economists and asset managers are predicting for 2021 and beyond could be inhibited by a market where American workers — particularly those at lower income levels — demand higher wages and employers refuse to pay them.
"What's happening: Even with nearly 10 million fewer Americans employed than before the pandemic hit, more business surveys are showing companies struggling to find workers."
"It prevented Southern senators from blocking debate and created the conditions for consensus."
LBJ's grip on the Senate likely had a lot more to do it than procedure. That said, why not compromise and lower to number of votes needed to end debate and vote from 60 to 55?
All Workers Should Have A Few Paid Sick Days. The President And Congress Can Make It Happen/Health Affairs
Pfizer vaccine may be less effective against South African and UK coronavirus variants, according to Israeli study - Alex Nicoll/Insider
"Israel's vaccine totals do not include Palestinians. Israel occupies the Palestinian territories of the West Bank and Gaza, and has rolled out the vaccine much more slowly in Palestinian territories, claiming that the Palestinian Authority is responsible for the distribution of vaccines.
"Earlier this month, a Palestinian student studying at Tel Aviv University in Israel won the right to be vaccinated after being turned away from a school vaccination site and then suing. Israel has just recently begun to vaccinate Palestinians."
Racism in Israel will make it harder for Jews everywhere to argue against discrimination when they are in the minority.
Medical care in the United States = whatever the market + public policy can bear. One in eight still have no coverage.
Gigi Gorgeous Reveals She's Pansexual as She Comes Out for 'Fourth Time': 'I Feel Like Just Me' - Glenn Garner/People
The staggering costs of being transgender in the US, where even patients with health insurance can face six-figure bills - Benji Jones/Insider
Sunday, April 11, 2021
Like humans, lots of support needed for stages of childhood development. But no need for old-age insurance. Do cicadas dream?
GENETIC EVIDENCE FOR ASSORTATIVE MATING BETWEEN 13‐YEAR CICADAS AND SYMPATRIC “17‐YEAR CICADAS WITH 13‐YEAR LIFE CYCLES” PROVIDES SUPPORT FOR ALLOCHRONIC SPECIATION - Chris Simon et al
Question: 13-year and 17-year cicadas mate at the same time every 221 years -- 9 times so far in the Common Era. Are they still similar enough genetically to create offspring?
Help wanted: Restaurants scramble to find new staff for reopenings - Meghan Ottolini and Marie Szaniszlo/Boston Herald
Tipped workers should have a minimum wage of at least half the minimum for other types of workers - probably more. $2.13 an hour doesn't cut it.
Amazon workers union vote in Alabama fails as labor tries to regroup - Paul Wiseman and Anne D'Innocenzio/AP
U.S. unions need to take a deep look at their value for workers and strategy to attract new members.
For one thing, $15 an hour can buy a lot more in Alabama than most other states. Maybe try a warehouse in a high-cost area.
China is a lot better making products than people...If the communist party can get over racial bias, there's a possible capitalist solution. Use some profits to acquire babies in low-income countries and require citizens to raise them. Provide financial incentives for coupling, randomly assign families into clan groups.
Here's another approach: The Handmaid's Tale. Always room for one more in Gilead. Under His eye. Praise be.
Improving early childhood development by allowing advanced child tax credits - Katharine Stevens and Matt Weidinger/AEI
Giving parents choice to spend more time raising young kids is a good idea. But this proposal would funnel a lot more $$ to higher income families than those with lower income and much greater need for financial assistance...Also, beware of policy proposals that spend billions but cost nothing.
"The strongest lifeline’: Districts struggle to find Allegheny County’s homeless students as COVID increased distance and needs - TyLisa Johnson/Public Source
"Only ‘mothers of color’ will be eligible for payments of $1,000 a month."
It's probably unconstitutional for governments to discriminate by race - even in a "good" way. In this case, a wealthy, majority-white county is directing funds to low-income people of a different racial background. If that's OK, what's to stop a county from earmarking funds for people of the race with the most power and wealth?
Targeting funds by race emphasizes classification by skin color and may fuel racism more than it reduces resulting disparities.
A Joe and Joe tango in the Senate?
Dear Democrats: What's good for the goose..? Cancelling minority party power for minor gains now = cuts to Social Security, Medicare, Medicaid, food stamps ... when Rs get back on top.
Transgender-bill veto overridden; state 1st to ban kids’ gender-affirming care - Michael Wickline and Rachel Herzog/Arkansas Democrat Gazette
Photo: Washington Post
"It’s been a year like no other, and we aren’t talking about the pandemic. There were rapid-fire public offerings, surging cryptocurrencies and skyrocketing stock prices. The number of billionaires on Forbes’ 35th annual list of the world’s wealthiest exploded to an unprecedented 2,755--660 more than a year ago. Of those, a record high 493 were new to the list--roughly one every 17 hours, including 210 from China and Hong Kong. Another 250 who’d fallen off in the past came roaring back. A staggering 86% are richer than a year ago."
It's often argued that it would be near impossible to administer a wealth tax because the very rich can hide their assets. Surely the gov could do as well as Forbes does at ranking billionaires. The IRS could develop a wealth baseline using estimates like these and dividing (or multiplying) by certain number (2? or 3?) to account for uncertainty. Then, allow the wealthiest a process to show documentation to correct the estimates.
The U.S. government approved trillions in aid. Many hard-hit families have yet to receive it. - Heather Long/Washington Post
"Millions are still waiting for stimulus checks and housing aid, and only 41 percent of the jobless are receiving unemployment, one study found."
The U.S. has created scores of programs and tax breaks distributing money to citizens and corporations. An electronic superhighway speeds it to those at the top. But $$$ often can't get through schlerotic administrative systems to reach millions of people most in need.
Nonprofit hospitals spend less on charity care than for-profits, study finds - Robert King/Fierce Healthcare
Well, maybe not so much. See study below.
Wealth taxation: The Swiss experience - Marius Brülhart, Jonathan Gruber, Matthias Krapf and Kurt Schmidheiny/Vox EU
"Our research shows that flaws in the design of wealth taxation can lead to large avoidance responses. Enforcement is key." ...
"...Wealth taxes are leakier in Switzerland than elsewhere, for two plausible reasons. First, Swiss cantons are small. This facilitates taxpayer mobility. We find that some 25% of the aggregate response to changed wealth taxation is due to taxpayer mobility. Another 20% of the response is due to capitalisation into housing prices, an indirect effect of mobility. Considering that a quarter of the mobility effect is international, we can conclude that some 34% of the aggregate response are due to intra-national mobility.
"Second, tax enforcement in Switzerland is comparatively lax, especially as financial wealth is self-reported. About 50% of the aggregate response are due to changes in reported financial assets of non-movers. Complementary evidence does not suggest that this effect can be attributed to changed savings or earnings.
"On the face of it, up to 85% of the large responses of taxable wealth observed in Swiss cantons could therefore be the result of the cantons’ small size and of lax enforcement." ...
Looks like like enforcement of local wealth taxes in Switzerland is like Swiss cheese.
TAX INCIDENCE AND RENTAL HOUSING: A SURVEY AND CRITIQUE OF RESEARCH - Richard England/National Tax Journal
"...regardless of who sends the tax payment to the revenue collector, who actually bears the economic burden of a property tax levied on a rental property(?)" ...
"We need additional research before we can know with confidence the extent to which renters bear the property tax."
With all the debate about the wisdom and viability of wealth taxes for those with the most, there is remarkably little research and analysis of the distributional impact of property taxes - a wealth tax used throughout the U.S. To what degree are renters already paying part of this wealth tax?
Should taxes on apartments for low-income workers be reduced? Part of the tax be rebated to cover the expense of maintaining the properties? ...
"McKinsey is overpriced and corrupt. It is also gunning for government cash."
Another day of life in the swamp... The sun rises and the sun sets.
"This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it appears to be the product of long-standing tax breaks preserved or expanded by the 2017 Tax Cuts and Jobs Act (TCJA) as well as the CARES Act tax breaks enacted in the spring of 2020."
Repealing “SALT” Cap Would Be Regressive and Proposed Offset Would Use up Needed Progressive Revenues - Chuck Marr, Kathleen Bryant and Michael Leachman/CBPP
State and local property taxes are a form of wealth tax. The ability to claim them as deductions allows owners to reclaim some of this money from federal taxpayers. Most of the benefit goes to the wealthiest.
Solving Urgent Housing Problems Requires Pairing Investments in Housing Stock With Expansion of Housing Vouchers - Douglas Rice/CBPP
How an Attack on a Black WWII Veteran Jump-Started the Civil Rights Movement - James Barber/Military.com
Boston’s hospital chiefs moonlight on corporate boards at rates far beyond the national rate - Boston Globe Spotlight Report
"As chief of Boston Children’s Hospital, one of the most esteemed pediatric hospitals in the world, Sandra Fenwick had outsized influence. After the pandemic struck last spring, she used that clout to lobby Massachusetts legislators for more money for telemedicine, a suddenly essential alternative to in-person visits...
"What she did not say on both occasions was that she had a highly paid side job: She has, since 2019, had a seat on the board of directors of a major, for-profit telemedicine company.
"Her directorship at Teladoc Health, formerly Livongo, vastly supplemented her $2.7 million yearly compensation at Children’s Hospital before her March 31 retirement. As of the last week in March, her company stock, which was compensation for her board work, was worth $8.8 million, according to an analysis for the Globe conducted by Equilar, a corporate leadership data firm. Like other directors, who are also paid for their work, she is legally bound to act in the company’s best interests."
Some of America’s wealthiest hospital systems ended up even richer, thanks to federal bailouts - and /WaPost
"As the crisis crushed smaller providers, some of the nation’s richest health systems thrived, reporting hundreds of millions of dollars in surpluses after accepting huge grants for pandemic relief" ...
"Much of the lopsided distribution was caused by the way the Department of Health and Human Services based the allotment of the initial bailout funds on hospitals’ past revenue. That favored institutions with well-off patients who have private health plans over those that rely on lower-paying government insurance, which is what many poor people use.
"HHS distribution formulas did not take into account which hospitals had enough assets to survive."
Political economics case study of how institutional wealth and power interact with public policy to create wider disparities.
Considerations on Raising the U.S. Minimum Wage To Help Workers and Families While Minimizing Negative Impacts - policy paper
"Figures show 77 companies received $8.2bn under tax changes related to Covid relief and yet almost every one let workers go"
New York-based petroleum carrier pays $375K to seaman fired for cooperating with barge explosion investigation - U.S. DOL
"Moved by tragedies to confront the complicated nature of being biracial, Desmond, a Colorado Rockies outfielder, is still away from the game, focusing on his family and his nonprofit."
It's ironic. At the moment, Democrats might view Mitch McConnell's ability to filibuster as their savior. The White House's ever-expanding list of "infrastructure" spending -- thrown together with zero fiscal discipline and little judgment -- could well backfire and render what they might ram through Congress unsustainable.
Putting the country further into debt through "big bang" legislation that makes all party factions happy could result in a world Democrats would not like: another four years of Trump in the White House and a Republican Congress -- this time unencumbered by the minority party's use of the filibuster.
That would be a shame since Democrats have a tradition of representing the interests of working-class and low-income people.
Republicans are right to oppose Biden’s infrastructure plan. But they must offer an alternative. - Henry Olsen/WaPost
"President Biden has released his so-called infrastructure plan, and it’s a doozy, both in terms of dollars spent and items tackled. Republicans will rightly be tempted to oppose the whole thing given its ambition to remake much of the economy in progressive Democrats’ image. That approach would be wrong.
"The plan itself is really a big bait-and-switch. It’s labeled the “American Jobs Plan,” but it’s really the “American Central Planning Plan.” A fraction of the spending is actually devoted to traditional infrastructure projects that serve all people, such as roads, ports, schools and other public facilities...
"Republicans should be against an infrastructure bill that cares more to expand public transit most people don’t use than on fixing roads they do. They should be for a bill that fixes roads, upgrades ports and airports, and improves crumbling schools to make them temples of learning. They should be open to paying for these through innovative methods, such as levying an annual fee on electric or hybrid vehicles that otherwise pay little for the roads they use. And they should also be willing to borrow at today’s near-zero interest rates, because investment in long-term projects is exactly what all economists say borrowing should finance...
"Americans do not want to live in a government-directed, semi-socialist society. That’s what they’re going to get, however, if Republicans let Biden dictate the terms of debate and make it a choice between his way and nothing. Republicans should instead learn from Reagan, present real freedom-preserving alternatives and make the 2022 midterms a real time for choosing."
"Of course, Biden’s emphasis on corporations and the rich makes sense. Tax increases on these groups are popular (so long as “rich” means “someone making more money than me”). High-income individuals and big companies have also done very well in recent decades relative to the rest of the country — yet have enjoyed extremely generous tax breaks. They should pay more.
"But even if these taxpayers pony up, there aren’t enough ultrarich people and megacorporations out there to fund the massive new economic investments and social services Democrats say they want, and claim they plan to actually pay for.
"This particular money tree has only so much cash on it. Especially because Democrats are simultaneously pushing other tax breaks that primarily benefit the rich."
Why watch now? Biden just put trillions on the table and a long list of possible recipients. Swamp creatures swing into action. Who will get the campaign $$$?
"Thus from knowing more about Trump we know more about the means used to succeed in the rich business milieu of New York, and even of the world, as Trump and his companions, made deals in Scotland, Russia, the Middle East, China and elsewhere...
"His persona revealed the depth of corruption at the center of politics and the center of business. These are unpardonable sins. Sins enjoyed in secret are acceptable or overlooked; sins flaunted are not. Those who replace him will do their best, not to change that because it has become a systemic feature, but to cover it up. But once you see the truth it will be difficult to go back pretending nothing has happened."
"The result has been that, as of March 30, 86 percent of shots that have gone into arms worldwide have been administered in high- and upper-middle-income countries. Only .1 percent of doses have been administered in low-income countries."
That's how markets work. Sale to the higher bidder.
‘This Is Unprecedented’: Why America’s Housing Market Has Never Been Weirder - Derek Thompson/The Atlantic
"In America’s largest, richest cities, home prices and rents are going in opposite directions."
URI faculty condemn professor for ‘statements that dehumanize people’ in trans community - Alexa Gagosz/Boston Globe/MSN
Professor Hughes' essay is below.
"The American political left is increasingly diving headfirst into their own world of lies and fantasy and, unlike in the imaginary world of QAnon, real children are becoming actual victims." ...
"Pharmaceutical companies, clinics, and doctors are profiting from these disfiguring treatments and procedures with no regard for the future of their victims. In fact, they are creating patients who will be in need of permanent treatments for the rest of their lives." ...
"The trans-sex/'gender identity' business is growing. According to a recent market analysis report, the “sex reassignment surgery market” was valued at $267 million in 2019, and given the 10-15% annual growth, is expected to earn $782 million in 2027. The report cites “higher incidences of gender dysphoria” and the increasing number of people choosing surgeries."
U.S. Sex Reassignment Surgery Market Size, Share & Trends Analysis Report By Gender Transition (Male To Female, Female To Male), And Segment Forecasts, 2020 - 2027 - Grand View Research
"A well-designed and fully paid-for infrastructure package could help support strong economic growth. Policymakers must not turn this package into a political wish list, paid for by our grandchildren."
Seems like conflicting messages are coming out of the White House. Lots of "insiders" with multiple agendas. Political ambition is larger than financial resources.
White House dramatically increased tax proposal as it sought to address tensions over next big spending plan - Jeff Stein/WashPost
"Biden aides see next major legislative effort as comparable to LBJ’s Great Society but face divisions among key allies."
"The White House is studying a range of tax increases on wealthy investors,” the Post reported. “…the increases would be the largest in decades.”
Opinion: Make the federal Rescue Plan tax credits permanent, and expand them to Colorado income taxes too - Lizeth Chacon, Carol Hedges and Scott Wasserman/Denver Post
"By making the tax credit fully refundable, the full amount will go to lower-income households for the first time ever and benefit 350,000 more children in Colorado."
"Beneath the surface: A historically high number of Americans are struggling despite what appears to be a recovering economy.
- According to the Census Bureau’s latest Household Pulse Survey more than 9 million renters are behind on their rent payments and at risk of being evicted, while around 11% of renters say they have no confidence they'll be able to pay next month's rent. (That number jumps to 25% for Americans with a high school diploma or less.)
- A recent CoreLogic report finds homebuyers are consistently relocating because of cost, moving from cities like Los Angeles, New York and Miami to cities like Riverside, Calif., Myrtle Beach and Tampa.
- The Census Bureau also found that 19.2% of U.S. adults are expecting a loss of employment income in the next four weeks, while 10.7% said they don't have enough to eat."
(Big Spending) Democrats have been reading Keynes, Friedman and . . . Twain?- George Will/Roanoke Times
Richard Cantillon's work on the money supply and inflation should be on the reading list...Money injections at some point will trigger inflation...But hard for models for tell when...Possibly because more than half U.S. dollars circulate outside the country. If the system were closed, affects might be more immediate and discernible. Substitution by Bitcoin and the like could also play a role...Will excessive public debt decrease confidence in the dollar and demand for it?
The Cantillon Effect: Because of Inflation, We’re Financing the Financiers - Jessica Schultz/Foundation for Economic Education
"Not to mention actively harming the living standards of low-income earners."
Tax Evasion at the Top of the Income Distribution: Theory and Evidence - John Guyton, Patrick Langetieg, Daniel Reck, Max Risch, and Gabriel Zucman/WCEG
"... random audits, which do not detect most sophisticated evasion, underestimate top tax evasion.
"After correcting for this bias, we find that unreported income as a fraction of true income rises from 7% in the bottom 50% to more than 20% in the top 1%, of which 6 percentage points correspond to undetected sophisticated evasion. Accounting for tax evasion increases the top 1% fiscal income share significantly."
The richest 1 percent dodge taxes on more than one-fifth of their income, study shows -Christopher Ingraham/WaPo
"Those at the very top of the income spectrum deny the U.S. government roughly $175 billion a year in revenue, researchers estimate."
Comment: Almost enough for the gov to finance child tax credits and a retirement plan/emergency savings contribution for the bottom 50%.
A Sea Change for Wages v. Capital?
Addicted to Identity Politics, Progressives May Miss a Historic Chance To Connect with America’s Working Class
Karl Polzer – Center on Capital & Social Equity
New research affirms what has been known for centuries. In the wake of a pandemic, a smaller, more risk-averse work force is often in position to demand higher wages. After the Black Death ripped through Europe, for example, peasants, shop workers and craftsmen realized they had gained bargaining power. Wages rose and the return on capital fell.
Though the impact of the current pandemic probably will be much milder, millions in the American working class suddenly deemed to be “essential” may come to a similar realization. People working with their hands in nursing homes, grocery stores, meat packing plants, or as home health aides, might ask whether they are getting a fair deal. Why, they might ask, are we expected show up to work and risk contagion for wages that barely cover the rent, while millions in the professional, management, and bureaucratic classes can shelter at home and still pull down a good salary? Why don’t we get paid sick days, health insurance, and other basic benefits like they do? Why can’t we spend more time raising our kids to help them get ahead?
In just two months, the Covid virus has upended the American workforce. Incomes have crashed. Unemployment has rocketed. Whatever new normal emerges will be different and probably more unequal. A larger portion of the workface – and the electorate -- may well be unemployed or working for low wages. Jobs that can support a middle-class lifestyle may be harder to find.
This is the perfect time for elected officials to talk to all American workers about how to improve their lives. Unfortunately, many Democrat leaders are deeply rutted in rituals of race and gender politics. The Democratic party may be blowing its chance to regain working class support -- once its bread and butter -- in two important ways. First, its policy agenda largely reflects upper-middle class priorities. Second, the party’s world view and messaging for many years has presumed that low-wage work is exclusive to blacks and Hispanics. To many Democratic leaders, pale-skinned poor people seem to have no standing. It’s almost as if they don’t exist...
Feb. 23, 2020
Dear Sen. Sanders,
Among all candidates for president, we think you are the most committed to making sure that ALL Americans have health insurance and access to comprehensive health care. We commend you for your leadership on this issue.
Unfortunately, it is hard to see how the Medicare-for-all legislation you propose could gain Congressional approval in the foreseeable political future. As a longtime member of the U.S. Senate, you must be able to understand the grounds for this concern.
Please answer this question: If, during your presidency, Congress could agree to pass a universal coverage bill using a different, perhaps more traditional, approach, would you sign it?
Getting ALL Americans affordable coverage as soon as possible is an important part of our policy agenda. We cannot wait until a political moment in the unforeseeable future in which a Medicare-for-all system can gain approval. We also recognize that any universal system put in place will need to enjoy long-lasting acceptance spanning the ebbs and flows of partisan politics.
Our question is of deepest sincerity. Your answer could be key to broadening your base of support and winning the presidency.
Thank you again for your leadership.
Karl Polzer, Center on Capital & Social Equity
A Widening Gap in Life Expectancy Makes Raising Social Security’s Retirement Age a Particularly Bad Deal for Low-Wage Earners
Essay - Karl Polzer
"Social Security’s long-term financial problems result in part from an increase in average life expectancy driven by wealthier people living longer, and, thereby, collecting more benefits. Policymakers should not use funding shortfalls attributable these trends as an excuse to cut monthly benefits alike for those who have gained (high earners) and for those who haven’t (low earners)."
Will Growing Inequality Make Social Security & Long Term Care Financing Fixes Harder?
2020 Society of Actuaries Living to 100 Symposium
Karl Polzer/Center on Capital & Social Equity
This essay explores two basic questions. The first is the extent to which capitalism, which emphasizes the rights of individuals to pursue their interests, and socialism, which focuses on group needs, tend to function in tandem as much as they do in conflict. As many agree that the political pendulum in recent decades has swung in favor of capitalism, the paper also discusses a range of public policies that can be used to reduce its imbalances and risks, with particular emphasis on moderating capitalism's tendency toward systemic inequality. Policy options range from programs to help the poorest, social insurance, higher taxation of income and wealth, and re-channeling to all citizens a portion of profits from private exploitation of public assets and business activities enabled by public laws and infrastructure.
Including all workers in our retirement savings system requires 2 things: a universal tax credit and a secure place to invest it.
Congress should be working on both.
Almost half of Americans have no net assets and little or no retirement savings. Many have no money to save, and if they did, and no retirement account to put it in. Meanwhile, Americans at the top of the economic heap get generous tax breaks for retirement savings – and capital gains from these assets widen the wealth gap.
Establishing a national retirement savings system and reshaping tax policy to provide every American worker a modest tax credit to put in a retirement account could improve economic security, help people prepare for old age, and facilitate saving for emergency expenses. This type of inclusive capitalism would make every American worker an owner of assets generating income. Such a system could be funded via a relatively small sacrifice to high earners without increased federal spending.
Include Everyone in the Retirement Savings System
Related initiatives and proposals:
- 40% of Older Americans Rely Solely on Social Security for Retirement Income - ADVISOR Magazine
- Plan Sponsor Groups Oppose Financial Literacy Proposal
- DOL Exemption Paves Way for Auto Portability
- State-run Auto-IRAs Will Help Close the Coverage Gap
- Half of Americans have no retirement savings — here’s how Congress can look out for them
- Why Not a Minimum Pension?
- Capitalize Workers!
- New York Envisions a State-run Retirement Plan for Private Workers
- If you want more equality, you have to embrace the risk premium
- A preview of the U.S. without pensions - older people work longer
- Why it's so hard for Americans to save
- OregonSaves web site
- Facing employer jitters, ERISA lawsuits, Oregon & other states push toward universal retirement savings systems.
- Treasury ending Obama Administration's myRA savings program.
- Bipartisan Policy Center commission suggests developing a near-universal retirement savings system along with raising Social Security benefits for lower-income and raising Social Security taxes to ensure program solvency.
- Universal system would significantly raise Americans' retirement readiness: EBRI
- Great Britain is ramping up a new universal pension system called National Employment Savings Trust or NEST. Features include automatic enrollment, mandated contributions, and a choice of diversified investment funds, including those based on a person's age.
- Harvard study finds tax subsidies less effective policy option in boosting retirement savings than automatic enrollment or putting money in low-income savers' accounts.
- Appalachian Savings Project helped child-care workers with low and variable earnings save 5.5% of income on average. Program evaluation.
- Urban Institute's "Super Simple" savings proposal. Sharing many features of a system now being implemented in Great Britain, this proposal would establish a universal retirement savings system with contributions from employers, workers, and the government.
- Oklahoma experiment shows power of universal children's savings. Early formal evaluation of the Oklahoma program.
- Great Britain's experience with "Child Trust Funds."
- "Automatic IRAs" available to workers and the self-employed. There is growing support for this type of approach.
- State Retirement Savings Resource Center - AARP
- Illinois to set to build an auto-IRA system for companies with at least 25 employees by 2017. Other states considering similar approaches.
- Click here for a summary of state activity as of July 2016.
- Three ways states are organizing retirement savings programs for private-sector workers.
- Aspen Institute issue brief explores how state retirement savings programs can utilize the federal saver's tax credit.
- Reps. Crowley and Ellison propose legislation to start savings accounts for all U.S. children.
- Research shows value of "hands on" financial education.
If you know of other proposals along these lines or would like to comment, please go the "Contact Us" page on this site and send us an email.
CCSE Proposes Universal Starter IRAs
Australia as a Model?
Australia’s “superannuation” system requires employers to contribute a percentage of employees’ income into diversified retirement funds managed by trustees. By 1999, 97 percent of Australia’s full-time employees and 76 percent of part-time employees were covered by the superannuation system. Over the years, Australia has increased required contributions and continued to refine the system, which has been credited with raising levels of capital accumulation and improving retirement security.
According to a July 2016 report, the Australian superannuation system continues to broaden coverage, but may be contributing to growing wealth inequality in its current form.
CBO report shows growing divergence of wealth between those at the top and bottom
The distribution of wealth among the nation’s families was more unequal in 2013 than it had been in 1989, according a Congressional Budget Office report released August 2016. "For instance, the difference in wealth held by families at the 90th percentile and the wealth of those in the middle widened from $532,000 to $861,000 over the period (in 2013 dollars). The share of wealth held by families in the top 10 percent of the wealth distribution increased from 67 percent to 76 percent, whereas the share of wealth held by families in the bottom half of the distribution declined from 3 percent to 1 percent."
In 2013, CBO reported that families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent. Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt.
Over the period from 1989 through 2013, family wealth grew at significantly different rates for different segments of the U.S. population. In 2013, for example: The wealth of families at the 90th percentile of the distribution was 54 percent greater than the wealth at the 90th percentile in 1989, after adjusting for changes in prices. The wealth of those at the median was 4 percent greater than the wealth of their counterparts in 1989. The wealth of families at the 25th percentile was 6 percent less than that of their counterparts in 1989.
While average wealth of the bottom quarter of the distribution dropped steeply over this time period, its amount of indebtedness grew significantly.
Research shows dramatic growth of upper middle class, major shift in economic resources
An Urban Institute report published in June 2016 found that since 1979 the percentage of wealthy and upper-middle-class Americans have grown dramatically while the middle- and lower-middle class has become smaller. The study found that "the proportion of the population in the upper middle class went from under 13 percent in 1979 to over 29 percent in 2014."
The report documents a major shift in the distribution of economic resources. "In 1979, the bottom three income groups controlled 70 percent of all incomes, and the upper middle class and rich controlled 30 percent. By 2014, this distribution shifted to 37 percent for the bottom three groups and 63 percent for the upper middle class and rich groups. The middle class alone saw its share of income decline from 46 percent in 1979 to 26 percent in 2014."
The study divides the population into five classes. The poor and the near-poor had annual incomes from $0 to $29,999; the lower middle class, from $30,000 to $49,999; the middle class, from $50,000 to $99,999; the upper middle class, from $100,000 to $349,999; and the rich, $350,000 and up.
Pew study shows long-term decline in size of middle class, rise in number of poor
After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it, according to a study released in December. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, according to the Pew Research Center analysis of government data. Highlights include the following:
"While the share of U.S. adults living in both upper- and lower-income households rose alongside the declining share in the middle from 1971 to 2015, the share in the upper-income tier grew more.
"Over the same period, however, the nation’s aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top. Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.
"And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.
"Meanwhile, the far edges of the income spectrum have shown the most growth. In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971. On the opposite side, 9% are in the highest-income tier, more than double the 4% share in 1971. At the same time, the shares of adults in the lower-middle or upper-middle income tiers were nearly unchanged.
"These findings emerge from a new Pew Research Center analysis of data from the U.S. Census Bureau and the Federal Reserve Board of Governors. In this study, which examines the changing size, demographic composition and economic fortunes of the American middle class, ‘middle-income’ Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three. Under this definition, the middle class made up 50% of the U.S. adult population in 2015, down from 61% in 1971."
Impact of Raising the Minimum Wage
Increasing the minimum wage would have two principal effects on low-wage workers, according to an analysis by the Congressional Budget Office. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.
- Five Facts about the Minimum Wage.
- Living Wage Calculator: The cost of meeting basic needs varies widely depending on where you live. MIT offers an on-line tool to help determine such costs and the living wage in each county and metropolitan area in the U.S. The site also has articles on related issues.
- State Minimum Wage Levels: Federal minimum wage law supersedes a state's minimum wage law if the state level is lower. In those states where the state minimum wage is greater than the federal level, the state minimum wage prevails. Two states have a minimum wage set lower than the federal minimum wage. In 29 states and DC, the state minimum wage is higher than the federal minimum. Fourteen states have a minimum wage that is the same as the federal requirement. The remaining five states have not established a minimum wage.
The Economics of Inequality
Deaton Wins Nobel Prize
"The award comes at a time when there is rising academic and popular interest in the study of inequality. Several economists, including Anthony Atkinson of the London School of Economics (who was among the leading contenders for a Nobel prize this year) and Thomas Piketty of the Paris School of Economics (who is still a bit too young for one), have published widely-read volumes on the subject over the last two years. Mr Deaton published his, The Great Escape: Health, Wealth, and the Origins of Inequality, in 2013. In it, he argued that while most people in the world have gained in terms of health and well-being from GDP growth over the last few decades, there are many groups that have missed out, particularly if on measures beyond those most commonly examined."
-- The Economist
Milanovic Explores Dynamics of Income Inequality in Age of Globalization
In “Global Inequality: A New Approach for the Age of Globalization,” Branko Milanovic identifies five forces pushing up inequality in the United States:
1. The increasing share of national income that accrues to owners of capital.
2. Very high and rising concentration of incomes from capital.
3. People holding high-paying jobs also often have high capital income.
4. The tendency of high-income individuals to marry each other.
5. The rising political power of the rich.
Revisiting the work of American economist Simon Kuznets, Milanovic describes how global income economy waxes and wanes in "waves" driven by economic and political forces.
CBO report analyzes impact of government transfers, taxes on rising U.S. income inequality
"Between 1979 and 2013, all three measures of income examined in this report—market income, before-tax income, and after-tax income—became less equally distributed, based on a standard measure of inequality known as the Gini index. The increase in inequality in both before-tax and after-tax income over the 35-year period stemmed largely from a significant increase in inequality in market income, mostly because of substantial income growth at the top of the market income distribution.
"Because government transfers go predominantly to lower-income households, before-tax income (which is equal to market income plus government transfers) was more evenly distributed in each year than market income. And because higher-income households pay a larger share of federal taxes than lower-income households do, after-tax income was more evenly distributed than before-tax income.
"In each year between 1979 and 2013, government transfers reduced income inequality significantly more than the federal tax system did."
View from the Paris School of Economics
- The return of a patrimonial (or wealth-based) society in the Old World (Europe, Japan).
- Inequality in America: Is the New World developing a new inequality model that is based upon extreme labor income inequality more than upon wealth inequality? Is it more merit-based, or can it become the worst of all worlds?
- In all nations with capitalist economies examined, the poorest half of the population owns virtually no assets or is in debt.
- In general, when the rate of growth of capital exceeds the rate of growth of the overall economy, wealth tends to concentrate. There is no natural market mechanism to counter this tendency; a nation's degree of wealth concentration in large part is a function of public policy.
"The Spirit Level: Why Greater Equality Makes Societies Stronger"
In this book, Richard Wilkinson and Kate Pickett present data making the case that countries with greater income inequality tend to have more health and social problems. Furthermore, there is evidence that the negative effects of inequality impact not just the poor, but people at all social levels. The Equality Trust provides slides of some of the supporting data.
This short Wall Street Journal video describes competing views of the wealth inequality issue and how to address it.
Robert Solow, the Russell Sage Foundation’s Robert K. Merton Scholar and Institute Professor Emeritus at MIT, joined New York Times columnist Paul Krugman and moderator Janet Gornick (Director of the Luxembourg Income Study Center and a former RSF Visiting Scholar) at the Foundation for a conversation on Inequality: What Can Be Done?, a new book by British inequality scholar Anthony B. Atkinson. In the book, Atkinson argues that economic inequality has reached unacceptable levels in many countries and lays out an agenda for reducing inequality. His policy proposals span five areas: technology, employment, the sharing of capital, taxation, and social security.
Columbia's Joseph Stiglitz takes on "The Great Divide"
Click on highlighted words to hear interview.
Hayek Revisited: Is Compromise Possible?
Is Friedrich Hayek's classic defense of individual liberty and economic freedom, rooted in moral tradition, just as relevant today as during World War II? Click here to read a summary of Hayek's "The Road to Serfdom," published by Reader's Digest as that war came to an end and a new international economic order was developed.
Today, how can monopoly power, whether wielded by corporations or government agencies, be checked while expanding economic opportunity and inclusion for all including the young, old, and those with few assets? If Hayek could have foreseen the ability of modern corporations to concentrate wealth and power, what policies would he recommend?
"...Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance -- where, in short, we deal with genuinely insurable risks -- the case for the state's helping to organize a comprehensive system of social insurance is very strong. ...
"(T)here is no incompatibility in principle between the state's providing greater security in this way and the preservation of individual freedom."
-- F. Hayek, The Road to Serfdom, Chapter 9/Security and Freedom
Thanks to the Washington Examiner for timely publication of this op-ed.
March 1, 2021
"...States could be given flexibility. Congress could set the national minimum at the high end of current proposals, say at $15 or $16, and allow states to adjust it downward by a certain margin, say 20% or 25%, but no lower. A national minimum wage corridor, rather than a line, could help California and New York build up and adjust down from a higher platform. Poorer states could choose lower levels in the corridor, say $12 to $13 an hour.
"Policymakers also should consider how changes to the earned income tax credit and child tax credit can complement wages for working-class families. Members of both parties support higher subsidies to raise children. Such payments should be targeted to help the poorest the most. Yet the current child tax credit provides the most money to higher-income families."
Feb. 17, 2021
Analysis: Ways To Raise the U.S. Minimum Wage To Help Workers, Families, While Minimizing Negative Impacts
A recent Congressional Budget Office (CBO) analysis reinforces the case that raising the national minimum wage is long overdue. But it also provides reasons for caution. Dialing up wages at the bottom up too fast and too much could increase the magnitude of negative side effects including job loss and price increases.
This paper examines potential impacts of raising the federal minimum wage nationally and in selected states and local areas. It ends with suggestions to temper negative side effects resulting from a higher minimum wage and discusses the need to fill income gaps that are too large for a higher minimum wage to address adequately, especially for some types of families. Options include setting a national corridor in which states can choose a minimum wage best fitted to them and supplementing low wages with more support for raising children.
Thanks to the Washington Examiner for running this op-ed and its openness to air a variety of views including our work exploring inequality and advocating for the bottom 50%. The Examiner's audience includes conservative members of Congress whose votes are needed to pass and sustain legislation advancing working class interests.
Biden's stimulus risks sending aid to those who don't need it - Karl Polzer/Washington Examiner op-ed
January 29, 2021
Who exactly will get the enhanced cash aid, and who won't, in the stimulus package the Biden administration will soon negotiate with Congress? This is the first of many distributional challenges awaiting lawmakers on both sides of the aisle. Choices on targeting increasingly scarce public funds will reveal which income groups both parties are committed to represent.
Details of the relief proposal had not been released as of this writing. But it is likely that the administration has been working from the distribution template in legislation Democrats introduced at the end of December. That bill, the Cash Act of 2020, would increase the $600 COVID-19 cash relief authorized last month to a total of $2,000 ($4,000 for couples). It also would send billions of dollars to well-off people that don’t need the money. As with previous COVID-19 cash aid legislation, an argument can be made that the distribution scheme shortchanges millions of people who need money to pay for food and rent.
The Center on Capital & Social Equity explores and promotes ways to include all workers and families in the output of capitalist economies. (See chart above.) All should have the opportunity to own shares of working capital. One way to mitigate the negative effects of monopolies, which antitrust regulation cannot entirely control, is through widespread profit sharing. This can be done by setting up a universal retirement savings system.
Missionary being eaten by a jaguar (Noé León, 1907)
Thanks to the Washington Post for publishing this as leaders in Congress negotiated changes to Covid-19 relief legislation:
Dec. 11, 2020 at 4:31 p.m. EST
Sens. Mark R. Warner (D-Va.) and Susan Collins (R-Maine) said in their Dec. 8 op-ed, “We can’t afford inaction on the covid-19 compromise package,” that their compromise “would help Americans at least get through the next four months.” With due respect to their bipartisan efforts, that was dead wrong.
Very little in the coronavirus relief package would help low-income Americans make it through even one month. What’s needed most is rent relief and money to cover food and utility bills. Yet no direct payments to low-income individuals similar to the checks issued under the Cares Act in the spring are to be found. The bipartisan proposal mainly would benefit interests with access to Congress: businesses (via cheap or free money, plus a liability shield), nonprofits/associations/churches, state governments, and professional classes including doctors, lawyers and accountants.
The D.C. government’s decision to send $1,200 checks to people among the hardest hit sets a good example for states and the federal government. Congressional leaders, many perched in the nation’s wealthiest strata, need to understand that about half of the U.S. workforce earns low wages or is out of a job. Viewed from the bottom up, the United States is becoming a much more impoverished nation.
Karl Polzer, Falls Church
The writer is founder of the Center on Capital & Social Equity.
Interesting evidence on how CARE Act stimulus helped low-income people get through the summer, despite large job losses, and why we need more stimulus now.
Thanks to the Washington Examiner for publishing this op-ed.
- Raise minimum wage with annual COLA (option: give states some leeway to adjust ↓ to reflect cost of living/labor).
- Five PAID sick days annually for ALL workers.
- 100% of Americans with health coverage by 2025 - with strong cost controls (any number of payers will work).
- Universal retirement savings system with minimum $500 annual government contribution (so, all Americans own working capital, have stake in market economy).
- No surprise medical bill >$500.
- Cut cost of college/expand apprenticeship programs.
- Improve Social Security benefits for bottom 50%. Achieve long-term solvency through higher taxes mostly on top 20%.
- Increase refundable child tax credit.
Life expectancy has not increased for the lowest-paid workers - National Academy of Sciences
A Widening Gap in Life Expectancy Makes Raising Social Security’s Retirement Age a Particularly Bad Deal for Low-Wage Earners - Karl Polzer/Society of Actuaries
Thanks to the Society for publishing this article.
2020 Society of Actuaries Living to 100 Symposium
"Although much of it may turn out to be pre-election packaging, legislation unveiled last week by Democrats to help racial minorities is a poorly conceived policy approach that fails to treat the nation’s low-wage workers fairly or equally. Senate leadership is billing the Economic Justice Act as a “major new legislative proposal to make $350 billion in immediate and long-term investments in Black communities and other communities of color.” However, policies that reward or punish citizens based on skin color not only rest of shaky legal and ethical ground. If enacted, they may ignite a political backlash that will set minority communities back rather than helping them move forward."
Click here to read article.
July 1, 2020
Letter to U.S. Political Leaders and Media
What wasn’t said at last week’s Congressional hearings on Covid-19 should raise alarm. Federal officials testified the CDC plans to issue “more targeted” testing "guidelines" for states and nursing homes. More advice is not enough. After five months and more than 120,000 virus deaths, lack of federal and state action -- and adequate funding -- for testing in nursing homes is homicide by negligent policy...
July 14, 2020
Yes! Credit to CMS Administrator Verma and the Administration. We've been calling on the feds to deploy rapid, comprehensive testing for nursing home residents and staff for 4 months. This is a major step toward reducing deaths from the pandemic. Now, make sure to include long term care providers not directly regulated by CMS, such as assisted living facilities, in the testing program. About 1.5 million live in nursing homes and one million in assisted living.
June 15, 2020
Thanks to the Washington Examiner for running this article.
"The current Medicaid regime is a mixture of bad and good. It often renders low quality nursing home care. But Medicaid does provide universal long-term care coverage, a rarity in American social policy. That’s a good thing. Medicaid needs to be upgraded – not gutted. Long-term care insurance and personal savings simply can’t fill the gap cutting Medicaid would leave." ...
"Witness the Trump administration’s delegation of most of the responsibility for the COVID-19 nursing home policy to the states. It recommended, for example, that states make sure COVID-19 testing gets done in nursing homes rather than having CMS require it nationally. Washington’s failure to take the lead on testing can’t bode well for nursing home quality and mortality rates."
Detroit Industry - Diego Rivera
Three policy recommendations include: "Capital gains tax rates need to be aligned more closely with marginal income tax rates, since large gaps lead to repackaging of income, reducing the redistributive effects of tax, creating horizontal inequity, and biasing measures of vertical inequality."
Awakening Slaves - Michelangelo
"In this talk, I present some of the figures & tables gathered in my book Capital and Ideology (2020) - an economic, social & political history of inequality regimes, from trifunctional and colonial societies to post-communist, post-colonial hyper-capitalist societies. As compared to Capital in the 21st Century (2014): Capital and Ideology is less western-centered, more political and focuses on the fragilities and the transformation of inequality ideologies. A much better book (I believe!)"
New Book by Anne Case and Angus Deaton
Comment: Excellent new paper. Remember Macro 101: national savings = national investment? This takes Keynes one step further. Instead of being invested, savings glut at top generates rents, increases systemic inequality, through increased lending to bottom 90%. Who pays high credit card interest and transaction fees, and who profits, e.g.?
Great Flower Moon - Richard Coleman
Posted April 16, 2020 and updated as noted
Pinpointing Disease Pathways, Treatments: Which (If Any) of The Dots Connect?
Changes in blood chemistry - hypoxia - bloods clots - organ damage
New link between hypoxia and blood clot risk (posted April 23)
U.S. races to stock up on dialysis supplies as kidney failure ravages virus patients – Politico Approximately 20 percent of coronavirus patients in intensive care around the city need the kidney treatment, often for weeks.
Sense of Smell
Letter to the Washington Post, Other Media - April 3, 2020
The Washington Post and other newspapers have done yeoman work in covering the coronavirus outbreak. Getting reliable and thoughtful information to the public quickly plays a critical role in helping to coordinate responses and saves lives. Unfortunately, the normal practice of restricting access to paid subscribers slows down dissemination of critical information, particularly to lower-income people.
Until this national emergency is over, the Post and other media should "ungate" all coverage related to the pandemic. That way people and organizations that subscribe can quickly get the word out about latest developments. This would be a great service to the public.
Karl Polzer/Center on Capital & Social Equity
Anchored Boats (1919) by Jonas Lie
March 3, 2020 - Letter to the Washington Post
The Post’s March 3 article “Bernie Sanders and Elizabeth Warren want a wealth tax. Wealthy Swiss say their model could work for America” raises key issues of tax fairness and enforcement.
Why would it be unfair to tax the super wealthy on total net assets when middle-class homeowners already are taxed on the value of homes largely financed through debt on which they pay interest to banks (whose profits flow disproportionately to the wealthiest)? Existing American wealth taxes -- state and local property taxes -- now finance most K-12 education. A national wealth tax could be used to make school funding more equitable and lessen the tax burden on the middle class. We already tax the middle class on property it partially owns. So why not tax the wealthiest on the value assets they own lock, stock and barrel?
Incentives are key to enforcement. A progressive wealth tax -- rising in increments from point A to point B -- could be enforced by applying the maximum rate to all households with wealth over a given threshold, and leaving it up to filers to document to the IRS that the lowest allowable rate is appropriate. Finally, a reasonable tax rate could provide an incentive for investment that spurs economic growth. A high rate could stifle it.
Karl Polzer/Center on Capital & Social Equity
A full time worker paid the federal minimum wage earns 13% of the average national income per worker in the US -- the lowest level since the creation of the minimum wage in 1938.
Source: Gabriel Zucman.
"Fastest way to cut carbon emissions is a 'fee' and dividend, top leaders say," Washington Post, 2/14/20
The article above is an example of how the virtue of economic analysis can't be measured by the pound or aggregate number of titles. The insight of a single analyst can contain more wisdom than collective opinion of 100.
Jan. 28, 2020 at 5:40 p.m. EST
The Jan. 25 news article “At Davos, enthusiasm for trees but not a carbon tax” did not mention an important reason political leaders might balk at levying higher carbon taxes. Carbon taxes, including those on gasoline, are highly regressive, affecting lower-income people much more than higher-income. For example, if gas taxes were doubled in the Washington area, most well-paid professionals would have enough capital (or access to credit) to easily switch to a hybrid vehicle. Over the life of the vehicle, their savings in fuel and taxes would probably cancel out any initial expense. In contrast, for lack of capital, a person driving a used gas guzzler to two low-paying jobs would be stuck driving the gas guzzler along with higher fuel costs.
Hiking fuel taxes would make it even harder for the growing share of the U.S. population working low-paying jobs to make ends meet and raise families. Carbon taxes would be more equitable and politically feasible if governments also made sure that workers struggling to pay their bills could afford the switch to clean-energy technology.
Karl Polzer, Falls Church
The writer is founder of the Center on Capital & Social Equity.
Response to WaPo dialogue stemming from our letter on carbon taxes
Dear Washington Post Editors:
Sabrina S. Fu made excellent points in her Feb. 4 letter “Quit saying ‘carbon tax.’ It’s a fee and dividend” addressing concerns I raised in a letter last week. Her proposal, however, would work best an ideal political world where one can control opponents' and skeptics' language used to frame an issue. My concern over tax fairness would remain because in the legislative bargaining process -- including a last-minute deal in conference committee -- the redistribution part of the proposal could easily be watered down, or eliminated, while the regressive "tax" or "fee" would become law.
Why don’t we start by applying her proposal to the current gasoline tax? If it survives the legislative process and works for current energy taxes, then move on to carbon writ large. Bottom line: advocates for low- and middle-income people trying to survive today need to keep a sharp eye on idealistic proposals coming from the better-situated trying to save the planet in the next century.
CCSE work on this issue:
Half of Americans Have No Retirement Savings. Here's How Congress Can Look Out for Them - Washington Examiner Op-ed (2018)
Aug. 7, 2019
By letting banks charge excessive credit card fees, US raises prices for all, shifts billions of $$$ to the wealthier
There are many mechanisms through which the financial establishment systematically drains money from workers struggling to pay their bills. Some hum along in plain sight while regulators and members of Congress barely take notice. Such is the case with the $80 billion in fees that banks will extract from credit and debit card transactions this year.
While other countries have lowered credit card transaction costs, either through non-bank market innovation (in China) or regulation (in the European Union, Australia, and other nations), U.S. policymakers empower banks and credit card networks to levy what amounts to a doubly regressive national sales tax...
(Also see the note on excessive credit card interest rates beginning on p. 6.)
A winner for the poor? Soda machine offers lower price for cash in Poulsbo, WA
Photo by Tom Hahler
Letter to Washington Post - Nov. 17, 2019
The Post’s call for vigorous debate on capitalism raises issue of its role as honest broker
Today’s lead editorial (“Capitalism itself is on the 2020 ballot: Every billionaire is not a policy failure, but each can afford to pay more”) begins by defending core values of capitalism. It then endorses higher taxes on the super wealthy to temper growing inequality. On the critical issue of how much more wealthy people should pay toward government operation and programs, the editorial is silent. It ends with a call for vigorous and informed debate over these critical issues during the 2020 election.
Along the way, by carefully acknowledging that its current owner, Jeff Bezos, bought the Post from the “civic minded” Graham family six years ago, the editors raise another important issue. That is whether one of the world’s most influential sources of news and public opinion can maintain both neutrality and vigor in the debate over capitalism if owned by one of the world’s richest people. As the debate deepens, this potential conflict of interest may become more awkward and harder to explain.
Karl Polzer, Founder, Center on Capital & Social Equity
Saez/Zucman's "The Triumph of Injustice: How the Rich Dodge Taxes and How To Make Them Pay"
Branko Milanovic's "Capitalism, Alone"
Map of golf clubs in and around San Francisco
Warning: Read the article above at your own risk. Author declaims any responsibility for variation in sense of humor. Note that some links in this article are intended to provide useful information, others irony.
NRA HQ in the Northern Virginia suburbs.
States strike back in federal court on AHPs
CCSE asked to co-sign amicus brief opposing U.S. Labor Dept.'s AHP rule, which increases risk of stripped-down benefits (e.g. no mental health coverage), healthplan insolvency, and consumers being defrauded.
Congressional Budget Office - July 2019
Findings: "In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million." … Similar, but smaller effects for minimum wage of $12 … Ditto for $10 minimum wage.
MIT Living Wage Calculator Provides Powerful Tool for State and Local Policymakers
Many U.S. households earning less than a living wage: MIT analysis
"Across all family sizes, the living wage exceeds the poverty threshold, often used to identify need. State minimum wages provide for only a portion of the living wage. For two adult, two children families, the minimum wage covers 73.0% of the living wage at best in the District of Columbia and 41.8% at worst in Virginia. This means that families earning between the poverty threshold ($25,298 for two working adults, two children on average in 2018) and the living wage $67,146) on average for two working adults, two children per year before taxes), may fall short of the income and assistance they require to meet their basic needs."
Example: Maryland is one of the wealthiest states in the U.S., but income varies widely by region. This has made it difficult for the legislature to set a uniform minimum wage.
Possible option: Set a statewide minimum wage at $15/hour (or other level) and let local governments reduce it up to a fixed percentage (say 30%) to account for regional differences. It's important to index any minimum to inflation.
If crimes against children can’t be stopped from within, the Vatican & its subsidiaries need purging from the outside: Letter to Washington Post
Every Catholic and every U.S. citizen should carefully read The Post’s Feb. 20 front-page article “ ‘The tragedy that keeps playing out.’ ” It is the latest in an endless stream of detailed evidence that the church power structure is incapable of changing from within to protect children in its care from sexual abuse. Senior church officials should be charged with criminal negligence for failing to remove predators they employ from positions from which they could injure children. Billions of dollars should be removed from the Vatican and its subsidiaries through the courts and distributed to victims. Still, would they change their ways?
Until this systemic problem is forcibly corrected, every church, school and other Catholic facility whose employees come into contact with children should undergo thorough inspection every year on the presumption that abuse may be occurring. If this cannot be corrected from within, then the Catholic Church should be broken up and reorganized. The same should happen with any church operating this way. Jesus commands that those in power do not harm those in their care, particularly children.
America: Build This Wall! :)
The stand off over building a border wall sadly embodies the narrow-mindedness of America’s leaders and disrespects the creative potential of American capitalism. It’s an undeniable fact that Donald, Chuck and Nancy are thinking way too small to discern the proper dimensions of a win-win agreement that could profit the United States for centuries...
Distribution of Household Income before/after Transfers and Taxes: CBO
Summary of slides released November 2018
In 2015, household income was unevenly distributed: Households at the top of the income distribution received significantly more income than households at the bottom of the distribution.
Before accounting for the effects of means-tested transfers and federal taxes:
- Average income among households in the lowest quintile (or fifth) of the income distribution was about $20,000.
- Average income among households in the highest quintile was about $292,000.
- Within the highest quintile, income was highly skewed toward the very top of the distribution: Among households in the bottom half of the highest quintile (the 81st to 90th percentiles), average income was $157,000; among the 1.2 million households in the top 1 percent of the distribution, it was $1.9 million.
The combined effect of means-tested transfers and federal taxes in 2015 was, on average, to increase income at the bottom of the income distribution and decrease income at the top of the distribution.
After accounting for the effects of means-tested transfers and federal taxes:
- Average income among households in the lowest quintile of the income distribution was about $33,000.
- Average income among households in the highest quintile was about $215,000.
- Among households in the bottom half of the highest quintile, average income was $125,000; among households in the top 1 percent, it was $1.2 million.
Below: Taxes, transfers resulted in significantly more income growth from 1979-2015 for the bottom income group than the middle three, while the top income group was held harmless.
Would Adam Smith favor policies creating a more inclusive economy?
Karl Polzer – Center on Capital & Social Equity
In a recent op-ed, I suggested that Congress establish a universal retirement savings system, possibly funded by a tiny tax on financial market transactions. In another, that growing income and wealth inequality has shrunk Social Security’s revenue and that taxing capital gains and high earnings could help the program stay solvent without cutting benefits. What would Adam Smith, the father of modern economic analysis, think of taxing financial transactions and capital gains? The notion of including all workers in saving and ownership of working capital? Helping correct the tendency of modern capitalism to concentrate wealth? Although conservative economists often cite Smith as a siren of an unfettered market, he might give these proposals serious consideration. Times have changed. Yet his manner of reasoning remains vital in addressing issues we face today.
Milanovic previews 'Capitalism, alone'
- "Improved quality of education and much easier access to education for all—that is, investing for stronger public education rather than the opposite trend of ever stronger private education.
- "Deconcentraton of ownership and income from capital through the use of tax incentives, a long and arduous process.
- "Employee stock ownership plans.
- "Higher taxation of inheritance (not current income).
- "Change in the rules re. financing of political campaigns (especially in the United States)."
Growing inequality has shrunk Social Security’s tax base. Revitalizing it could restore solvency without cutting benefits.
As the graying and outsized baby boom generation claims Social Security benefits, Americans increasingly doubt whether the program can pay all that it has promised – or even continue to cut checks at all. In their annual report released June 5, Social Security’s Trustees warn that, unless Congress acts to restore the program’s long-term solvency, by 2034 it will only have sufficient funds to pay 77 cents of each dollar currently promised. By then, the Social Security trust fund will be empty and the program will lack legal authority to pay out more than it can bring in through earmarked taxes. An adjustment this size in 2018 would drop the average annual Social Security payment of $16,848 to $12,973. Most older Americans depend on Social Security for all or most of their income.
The longer Congress plays chicken on this issue, the greater the risk that changes such as tax increases or benefit cuts, or a combination, will have major economic impacts on retirees and workers. The trustees’ report emphasizes the growing ratio of retirees receiving benefits to workers contributing payroll taxes as a major force impinging on the program’s solvency. Underlying factors include the size of the baby boom generation and a lower birth rate. But other forces are at work. Growing wealth and income inequality have significantly eroded Social Security’s tax base.
First, wealth inequality: As Americans at the top of the economic spectrum continue to amass equities, bonds, and other assets, the portion of national income from capital investment has increased significantly, pushing down the portion earned through labor. In the United States, labor’s share of earnings fell about eight percentage points between 1995 and 2013 (compared to a bit over three percentage points in other Organization for Economic Co-operation and Development countries). Since Social Security relies primarily on a tax on labor for its sustenance, the relative growth of capital income gradually is choking off a source of revenue.
Second, income inequality: As part of its structure to promote fairness between economic classes, Social Security replaces relatively more lifetime income for lower-wage workers than those with higher wages – but also caps wages subject to its payroll tax, in part to increase the net value of Social Security in the eyes of higher earners. The wage cap for 2018 is $128,400. Over the past several decades, wages of lower-income Americans have stagnated, while those at the top have grown significantly. As a result, the trustees note that portion of wage income taxed by Social Security has dropped by about six percentage points (see p. 144). In agency jargon, the “taxable ratio” of payroll fell from 88.6 percent in 1984 to 82.6 percent in 2000, and has fluctuated near the latter level since then. Social Security Administration (SSA) actuaries assume the ratio will remain about 82.5 percent over the next decade. In summary, unless the tax cap on earnings keeps up with the growing prosperity of those at the top, Social Security’s tax base shrinks as a portion of national income.
America's Inequality and What To Do about It
The Poor Will Always Be with Us. Will the Middle Class?
"The top 1 percent saw their wealth increase by 156 percent (from 1989 to 2013), while parents in the bottom half saw their wealth shrink by 260 percent. About a third of all families with children in 2013 had no wealth, only debt."
"Rising Inequality and the Changing Structure of Political Conflict" - Piketty lecture at the Kennedy School
Extreme Income Inequality: Brazil, India, the Middle-East and South Africa
In all of these four regions, top 10% earners receive more than 50% of national income. These societies are characterized by a dual social structure, with an extremely rich group at the top whose income levels are broadly comparable to their counterparts in high-income countries, and a much poorer mass of the population. The authors highlight the importance of the historical legacy of social segregation and of modern institutions in shaping income disparities.
Which Way Is Your Country Headed?
Analysis including Housing Assets Finds Piketty May Have Underestimated Wealth Gap
"One of the most intensely debated economic questions in recent years is the relationship between real returns on wealth, and the real rate of growth. In his influential book, Piketty (2014) argued that if the return to capital exceeded the rate of economic growth, rentiers would accumulate wealth at a faster rate than incomes grow. Comparing returns to growth, or “r minus g'' in Piketty's vernacular, we uncover that in fact “r >> g” for more countries, more years, and more dramatically than Piketty himself reported."
These two figures show that the only exceptions to “r>>g” happen in very special periods: the years in or right around wartime. In the pre-WW2 period, r minus g was on average 5% per annum (excluding WW1). As of today, this gap is still quite large – in the range of 3%–4% – and it narrowed to 2% during the 1970s oil crises, before widening in the years leading up to the Global Crisis.
"We show that income inequality has increased in nearly all world regions in recent decades, but at different speeds. The fact that inequality levels are so different among countries, even when countries share similar levels of development, highlights the important roles that national policies and institutions play in shaping inequality."
How Humans Extract Rent from Nature's Gifts
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the licence to gather them, and must give up to the landlord a portion of what his labour either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land, and in the price of the greater part of commodities, makes a third.”
Lucas Chancel & Thomas Piketty,
This chart shows that collective income accruing to India's “middle 40” rose to just over 45 percent by the early 1980s, while that of the top 10 percent declined from about 37 percent in 1951 to 30 percent. After 1990 the two trends reverse. The top 10 percent garnered more than 55 percent of all income in 2014, almost double its share in the early 1980s, while the middle 40 percent’s share fell to just over 30 percent.
U.S. Tax Policy Should Boost Retirement Savings for All Workers, Not Just the Wealthiest
Center on Capital & Social Equity - October 2017
Current tax breaks for retirement savings mainly subsidize the top half of the income distribution, leaving almost half the workforce out of the system. Part of the federal tax subsidy for 401(k)s should be rechanneled into a retirement savers tax credit that all workers get ($500 to $1,000 a year).
In 2017 employees can put up to $18,000 in tax-deferred defined contribution plans (e.g., 401(k)s) and those 50 or older can put aside an additional $6,000. Total employee and employer contributions are limited to $54,000. The Tax Policy Center estimates that in 2016 the tax savings from all tax-qualified pension and defined contribution accounts averaged about $1,040 per taxpayer. (No kidding: 1040.) These tax savings, however, were extremely tilted toward the well-off. Only 4.4 percent of workers in the lowest fifth of the income distribution received any tax benefit and their average tax savings in 2016 was $20. In contrast, 82 percent of the highest-paid quintile received a tax benefits with an average benefit of $4,750. About 48 percent of the middle fifth received a tax benefit with an average savings of $580.
The result of this tax policy? About half the American population has put aside virtually nothing for retirement, while many wealthy people are being paid to save money they would have saved anyway. It’s clear that retirement savings tax breaks could be better targeted. For more information see:
- Distribution of Tax Benefits by Family Income
- Retirement Tax Incentives Are Ripe for Reform Current Incentives Are Expensive, Inefficient, and Inequitable
- Who Benefits from Asset Building Tax Subsidies?
- Estimates of a Proposal to Establish Guaranteed Retirement Accounts, Financed by Reduced Limits on Current Law Contributions to Defined Contribution Retirement Saving Plans
- There's a Better Way To Target Retirement Savings Tax Breaks
"Worry not at all about inequality if it is achieved by smart betterment....But do worry about inequality if it is achieved by using the government to get protection for favored groups. It is what a large government, worth capturing to get the protection, is mainly used for, to the detriment of most of the people off-stage."
Are Workers Receiving the EITC Being Shortchanged on Social Security?
updated October 2017
..."Under the current system, a person whose highest earnings averaged $15,000 a year over 35 years would end up with about $10,542 in annual Social Security benefits – the same as a worker averaging $15,000 wages plus various amounts of EITC. A worker averaging $20,000 in wages would end up with $1,600 (15%) more in annual Social Security benefits compared with another with the same total income but instead averaging $15,000 wages and taking home $5,000 in EITC. Similarly, someone averaging $25,000 in wages would end up with $3,200 (30%) more in Social Security benefits than a counterpart averaging $15,000 and receiving $10,000 in EITC."
Green lines: current law Purple: proposed increases
D's Push for Major EITC Expansion
Two members of Congress are teaming up to bring much-needed relief to low-wage workers and their families through an expanded Earned Income Tax Credit (EITC).
Senator Sherrod Brown (D-OH) and Representative Ro Khanna (D-CA) introduced the Grow American Incomes Now (GAIN) Act in both the House and Senate. Currently, a family of three can receive a maximum EITC of $6,318, while workers without dependent children can receive at most a $510 credit. The legislation would roughly double the EITC for eligible workers raising children and increase the credit for workers without dependent children nearly six fold. The bill also lowers the qualifying age for the EITC from 25 to 21.
Expanding the EITC is a good idea. However, as the share of workers' income provided by government subsidies rises, the case becomes stronger for the federal government to begin making corresponding payments to Social Security. Also, a way to simplify tax policy might be to coordinate the EITC and Child Tax Credit (CTC) in the following way: the EITC could be based solely on income, not family structure. The refundable component of the Child Tax Credit could be expanded to provide additional income for low- and middle-income families.
September 2017 - Karl Polzer
Expanding Use, Scope of the EITC & Child Tax Credit: a Win-Win for Workers and Employers
This paper makes the case that helping employees access the Earned Income Tax Credit and Child Tax Credit – along with supporting bipartisan legislation to expand these programs – can help industries with large numbers of low-to-middle wage workers. In the long-term care field, such a strategy can improve worker income through government wage supplements, thus encouraging more to enter the workforce. Increased labor supply would dampen employer wage costs – all while expanding the range of affordable services providers can offer. This could result in hundreds of millions of dollars of added value in worker earnings as well as provider and customer savings.
From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016
"...(T)op income shares are now similar to (or higher than) the levels observed in the U.S. ... inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. ...the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia."
High earnings of labour are an advantage to the society - Adam Smith
“Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.”
-- The Wealth of Nations (originally published in 1776)
For the last eight years of Liu Xiaobo’s life, the Chinese authorities robbed him of his liberty and his dignity. But in the state-enforced silence surrounding Liu’s stage-managed death, the words of his Nobel Prize lecture ring out even louder: “Freedom of expression is the foundation of human rights, the source of humanity, and the mother of truth.”
"Natural forces of a market economy and capitalism will drive that disparity unless government does things to help." Buffett says EITC should be expanded so workers can have decent lives. (See CCSE article on this site about relationship of EITC and Social Security.)
Thomas Piketty, Li Yang, Gabriel Zucman
Researchers find that the share of public property in China'snational wealth has declined from about 70% in 1978 to 30% in 2015...
"The top 10% income share rose from 27% to 41% of national income between 1978 and 2015, while the bottom 50% share dropped from 27% to 15%. China’s inequality levels used to be close to Nordic countries' and are now approaching U.S. levels."
Robin Hood Tax Reform - May 2017
How Modest Changes in Health, Retirement Tax Breaks Could Produce Major Gains in US Health Access, Financial Security – at Little or No Added Government Cost
..."The positive impacts of two such changes discussed below could include 1) lowering the rate of health care cost inflation; 2) providing revenue to help subsidize health insurance for the unemployed; 3) creating seed money and a low-cost infrastructure for a universal retirement savings system; and 4) increasing retirement security for low- and middle-income people; and 5) helping people save for long-term care costs. Looking at benefit tax exclusion is already on the table as Congress faces the unsavory chore of developing a fix for the Affordable Care Act’s clumsily designed “Cadillac” health plan excise tax. Most importantly, these changes could result in greater economic fairness and inclusion."
Eyes on the Prize: Universal Health Insurance Is the Goal
Charles Krauthammer’s March 31 op-ed, “The road to single-payer health care,” was largely on point. However, it is important to separate the concepts of “single-payer,” which is a means toward a goal, and “universal coverage,” which should be the primary goal. Universal coverage can be achieved without having the government cover every citizen. Even if government programs cover most citizens, there will always be multiple payers, including individuals and taxpayers; a universal system also could allow employer plans to operate. Ironically, creating a larger government role in sponsoring and subsidizing health insurance could result in a more competitive market for providing services. Karl Polzer - April 2, 2017
updated Dec. 14, 2016
Obama Signs Bipartisan Bill To Speed Miracle Cures to Market. Who Will Have Access to the New Technology? Who Won’t?
In a city that’s witnessed trench warfare between Congress and the White House during the last six years of the Obama Administration, this was a rare moment: a bipartisan love fest. On Dec. 13, 2016, President Obama signed the "21st Century Cures Act," which includes expanded funding to push medical technology through the development pipeline. “We are bringing to reality the possibility of new breakthroughs to some of the greatest health-care challenges of our time,” Obama said. “It is wonderful to see how well Democrats and Republicans in the closing day of this Congress came together around a common cause.”
The legislation was backed by a coalition of interests, including the powerful pharmaceutical industry, academia, and consumer groups supporting speedier medical research. Its few critics have mainly argued that the popular funding provisions “mask a worrisome loosening of regulations at the Food and Drug Administration that could put patients at risk.”
Hardly anyone, however, is asking the million-dollar question: Which Americans will end up having access to new miracle cures, many of which promise to be extremely expensive? And, who will not? The country’s patchwork of health insurance already is rationing expensive new technology to some populations, particularly low-income people. Congress, meanwhile, has begun a fractious debate over repealing, and possibly replacing, the Affordable Care Act (ACA). So, while lawmakers have just put their collective foot on the technology gas pedal, they may soon slam the brakes on funding for expanded coverage, potentially throwing millions of Americans into the ranks of the uninsured...
Traditions of Democracy
"The tradition of Jefferson and Jackson might recede, but it could never disappear. It was bound to endure in America so long as liberal capitalistic society endured, for it was the creation of the internal necessities of such a society. American democracy has come to accept the struggle among competing groups for the control of the state as a positive virtue -- indeed, as the only foundation for liberty. The business community has been ordinarily the most powerful of these groups, and liberalism in America has been ordinarily the movement on the part of other sections of society to restrain the power of the business community. This was the tradition of Jefferson and Jackson, and it has been the basic meaning of American liberalism."
Excerpt from Chapter 37, "The Age of Jackson," Arthur M. Schlesinger, Jr.
Federal Reserve researchers probe economic inequality, policies that could spread U.S. income gains
The increase in U.S. income inequality since 1970 has generated large welfare gains for households in the top 20% of the income distribution and significant welfare losses for those in the bottom 80%, according an analysis published by the Federal Reserve Bank of San Francisco. The modeling found that some of the impact of this upward income shift was mitigated by "the dramatic rise in government redistributive transfers, which have doubled as a share of U.S. output over the same period."
The analysis concludes: "Alternative simulations imply that a relatively modest boost in the historical growth rate of government redistributive transfers, accompanied by modestly higher average tax rates, could have achieved small but equal welfare gains for all households. Overall, our results suggest that there is room for policy actions that could offset the negative consequences of rising income inequality."
June 30, 2016
Reflections on American Wealth Concentration – and What To Do About It
Just over one year ago, the Center on Capital & Social Equity (CCSE) began exploring the phenomenon of growing wealth concentration and inequality, while advocating for a more inclusive form of capitalism. Following are some general observations.
Over the past year, the issue of economic inequality in the United States has moved from the backburner to center stage. Much credit for this goes to Sen. Bernie Sanders’ attack on the “top one percent” in his run for the Democratic nomination. While there is ample reason to question many details of his proposals, Sanders’ call for an increased role for government in providing opportunity and essential services resonated with many Americans who feel they have been left out of the economic mainstream. Yet the problems posed by rising economic inequality are deeply rooted and go well beyond the disproportional gains of the top one percent. They will be harder to address than portrayed in election rhetoric and require judicious use of public resources.
Three observations can be made about economic inequality in the United States. First, income and wealth inequality have grown steadily since the 1980s, suggesting that some of the causes are structural in nature. Second, high levels of inequality increase the risk of political and economic instability. Finally, moving toward an economy that is less unequal and offers opportunity to more Americans will require major changes in public policy and shifts in spending.
Life Expectancy Gap is Large - and Expanding
The gap in life expectancy between the richest 1% and poorest 1% was 14.6 years for men and 10.1 years for women. A study published in the Journal of the American Medical Association also found that inequality in Americans' life expectancy is growing over time.
How the U.S. Retirement Savings System Magnifies Wealth Inequality
Karl Polzer, Center on Capital & Social Equity
Economic inequality and wealth concentration have have emerged as central issues in the U.S. presidential race. While these concerns appear to have risen to the forefront quite suddenly, forces driving wealth concentration have been building for decades. As analysts probe the dynamics beneath these trends, they may find that America's shift to a defined contribution retirement system is playing an increasing role in the concentration of wealth...
So, What Does Jesus Say about Wealth Concentration and Inequality?
In recent years, the tendency for wealth to concentrate in the hands of a powerful few has come under scrutiny, prompting concern about growing inequality from political and religious leaders, most notably Pope Francis. While excessive wealth concentration is likely lead to greater social ills and unrest, how to rein in growing inequality is a more difficult question. Should we move away from capitalism and the market system? Develop a more socialist model? Reform capitalism from inside to benefit people more equitably? ...
Investigators Detail Growth of Extreme Poverty in U.S.
Virginia's push to end veteran homelessness faces steep challenges
On Nov. 11, 2015, Virginia Gov. Terry McAuliffe announced that the state was the first to "functionally" end homelessness among veterans of the U.S. armed forces. To assist two veterans living on the street not aware of the program, the Center on Capital & Social Equity contacted the governor's office, asking how veterans can gain access to housing and other services under the collaboration involving state, federal, and local government agencies.
The Virginia Department of Veterans Services provided information (click on the button below), including contact points at the local and state levels where veterans and their advocates can begin the process of finding temporary or permanent housing.
To follow up, we contacted three Northern Virginia jurisdictions and found an array of barriers to functionally ending veteran homelessness. These problems include lack of knowledge on the part of local officials of the state's initiative; lack of affordable and subsidized housing resources; high housing prices; lack of shelter space (for example, Fairfax County has 1 million residents but only three homeless shelters that can't meet wintertime demand); unwillingness by many street people to seek help (for a variety of reasons); coordination issues between state and local, local and local, and federal and state and local agencies; bottlenecks like having to go through shelters to gain access to housing, when shelter space is limited; and many other factors.
While helping one of the veterans gain access to temporary shelter and services, we reported these issues back to the state officials who said they will take steps to increase awareness of the governor's initiative, including posting information about the program on a state website. For more detail, see our correspondence with state and local officials, which can be accessed by clicking the second button below.
Let’s sell health insurance “across states lines” – through Medicare
Republicans, stop with being the party of “no.” It’s time to step up to the plate and seize the initiative on health policy...
Playing Immigration Piñata
Deception and hypocrisy are no strangers to politics. This seems particularly true in recent incantations about illegal immigration. Republican presidential candidates – other than Jeb Bush – mostly want to round up illegals and dump them into Mexico. Donald Trump wants to spend billions to build a massive wall in the wrong place...
How Can U.S. Policy Reduce Financial Risk for the Very Old?
CCSE explores ways to reduce retirement risk and pay for long term care in Society of Actuaries monograph.
Finding: 401(k)rule changes including new "sub-accounts" could help seniors better save for needs in very old age.
Retirement Strategy: When Should I Start Receiving Social Security Checks?
Americans can begin taking Social Security between ages 62 and 70. Waiting to take Social Security can increase the amount on your check significantly. Collecting Social Security benefits early has the opposite effect.
When to start depends on many factors including your life situation, needs and plans. Most Americans begin taking Social Security early.
The U.S. Consumer Financial Protection Bureau offers this planning tool and other information to help people work through this decision.
A Dream Deferred
What happens to a dream deferred?
Does it dry up
like a raisin in the sun?
Or fester like a sore--
And then run?
Does it stink like rotten meat?
Or crust and sugar over--
like a syrupy sweet?
Maybe it just sags
like a heavy load.
Or does it explode?
Still I Rise
You may write me down in history
With your bitter, twisted lies,
You may tread me in the very dirt
But still, like dust, I'll rise.
Does my sassiness upset you?
Why are you beset with gloom?
'Cause I walk like I've got oil wells
Pumping in my living room.
Just like moons and like suns,
With the certainty of tides,
Just like hopes springing high,
Still I'll rise.
Did you want to see me broken?
Bowed head and lowered eyes?
Shoulders falling down like teardrops.
Weakened by my soulful cries.
Does my haughtiness offend you?
Don't you take it awful hard
'Cause I laugh like I've got gold mines
Diggin' in my own back yard.
You may shoot me with your words,
You may cut me with your eyes,
You may kill me with your hatefulness,
But still, like air, I'll rise.
Does my sexiness upset you?
Does it come as a surprise
That I dance like I've got diamonds
At the meeting of my thighs?
Out of the huts of history's shame
Up from a past that's rooted in pain
I'm a black ocean, leaping and wide,
Welling and swelling I bear in the tide.
Leaving behind nights of terror and fear
Into a daybreak that's wondrously clear
Bringing the gifts that my ancestors gave,
I am the dream and the hope of the slave.
Easter Essay: Is the Golden Rule Enough? Mathematics of the Two Great Commandments
Whether people see themselves as Christians, followers of other faiths, or atheists, all are pulled by the power of many gods: the god of money, the god of technology, the nymph of new electronic gadgets, satyrs of TV and the worldwide net, and so on. In adoration of possessions, money, and power, atheists and believers are equal -- even deeply religious in the way that Paul sarcastically described the polytheistic statuary of Athens as evidence of its faith. Some of today’s humanists and atheists are more Christian in spirit and behavior than nominal Christians. And, unlike some Christians, many have thought through their views on religion and feel they need to have moral justification they can explain. The conventional morality of good people often is a humanism expressed by the Golden Rule.
Jesus taught the Golden Rule two thousand years ago, as one of two great principles. But to Jesus the Golden Rule, while essential, is incomplete without a first principle. Jesus preached the Golden Rule in the Sermon on the Mount. "Therefore, whatever you want men to do to you, do also to them, for this is the Law and the Prophets." (Mat 7:12 NKJV).) Here he is speaking to a large crowd that can't hear him that well and needs a simple guideline.
Later, speaking to religious leaders, he aligns the Golden Rule with the first commandment. In Matthew 22:34-40, "hearing that Jesus had silenced the Sadducees, the Pharisees got together. One of them, an expert in the law, tested him with this question: ‘Teacher, which is the greatest commandment in the Law?’ " To this audience, Jesus provides more context: "'Love the Lord your God with all your heart and with all your soul and with all your mind.' This is the first and greatest commandment. And the second is like it: 'Love your neighbor as yourself.' All the Law and the Prophets hang on these two commandments."
The interaction of the two great commandments shows why the second commandment is not sufficient and why God -- an overarching Spirit that connects individual people -- is necessary, even for a functional morality. For example, if we only love our neighbor as ourselves -- and we happen to be filled with hate and rage for ourselves -- then we won't treat our neighbors very well. The Golden Rule can remedy part of this problem by changing the focus from "loving" to "treating" neighbors as we would have them treat us -- thereby imposing our view of ideal behavior and not raw emotion as the standard. But that won't work for some people either, especially those who lack a model of ideal behavior. So, these folks still might act destructively to people around them.
The idea of a single God, or life force, connecting all people creates a vertical pull toward a connecting spirit (the first commandment) to accompany the horizontal equity of the second commandment. Mathematically, the second commandment is nothing more than a simple equation: Love for me = Love for you. The first commandment is a command to maximize Love to the limit of capacity. Without the first commandment, the potential of a person's love would be limited by inherited and culturally absorbed defects and injuries. The two commandments can be seen as consistent with scientific theories of evolution. The first commandment reflects the biological imperative that no individual can carry on life on his or her own. Individuals must interact and communicate with others to continue the stream of life. The Golden Rule suggests that individuals have the freedom to choose the way they interact and communicate with others. Perhaps those with greater faith and sense of fairness are more likely to pass along their genes. --
Karl Polzer, Easter 2017
"In God We Trust" was adopted as the official motto of the United States in 1956 as an alternative or replacement to the unofficial motto of E pluribus unum, which was adopted when the Great Seal of the United States was created and adopted in 1782. Secularists have expressed objections to its use and have sought to have the religious reference removed from the currency. Wikipedia, 2015
We invite you to join the discussion.