Exploring economic inequality - Advocating for the bottom 50%
Extending Eviction Moratorium Helpful Now, But Long-Term Housing Crisis Requires Voucher Expansion - Alicia Mazzara/CBPP
"Judge Howard wrote that in crafting this debt program benefiting farmers based on race that 'Congress also must heed its obligation to do away with governmentally imposed discrimination based on race.' She added that 'it appears that in adopting Section 1005’s strict race-based debt relief remedy Congress moved with great speed to address the history of discrimination, but did not move with great care.' "
"Ruthlessness, ideological agility and economic growth have kept it in power"
"Over the years Western observers have found plenty of reasons to predict the collapse of Chinese communism. Surely the control required by a one-party state was incompatible with the freedom required by a modern economy? One day China’s economic growth must run out of steam, leading to disillusion and protests. And, if it did not, the vast middle class that such growth created would inevitably demand greater freedoms—especially because so many of their children had encountered democracy first-hand, when they got their education in the West."
This Army Navy Country Club charges enlisted troops $77,700 to join — double the price for retired officers - Haley Britzky/Task & Purpose
"The fee for active duty 2nd Lieutenants: $1,200."
"...the Army Navy Country Club says on its website that its purpose is to “promote social intercourse among those citizens, military and civilian, who are bound together by the fraternal and patriotic spirit of serving the best interests and efficiency of the National Defense,” at “moderate expense.”
"Aside from their decision to use the phrase “social intercourse” on their website — we don’t have time to get into that — the claim that charging enlisted service members more than $77,000 to join the club constitutes a “moderate expense” is… a stretch.
"I’m under no illusion that enlisted troops are bursting with a desire to belong to this country club, or any country club for that matter. They likely have something better to do, like whatever deviant activities they’re into that week.
"But given that the enlisted fee is roughly $1,600 less than what an Army sergeant major with over 20 years of service makes in a year, I think what the ANCC meant to say was that they want to serve officers “who are bound together by the fraternal and patriotic spirit of service the best interests and efficiency of the National Defense,” not you enlisted hatchet-wielding perverts."
Warren Buffett Has Given Away Half His Berkshire Stock But Is Worth Twice As Much - Sergei Klebnikov/F
Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank
What hath Congress roth? Lawmakers let the wealthy amass billions in tax-free IRAs. But, somehow, there's not enough money to put a few hundred dollars a year in an account for each low-income worker:
Vote people who don't care about you out of office!
Social Security Versus National Security: Whose Entitlement Really Makes Us Safer? -Rebecca Grodon/Common Dreams
"Unlike actual citizens, U.S. arms manufacturers seem entitled to ever-increasing government subsidies—welfare for weapons, if you like."
An argument can be made that a publicly funded military is the core element of a country's socialist infrastructure - however large or small that might be.
Freedom isn't free. Americans crave liberty but have a long history of neglecting to pay soldiers. Creating a means to pay the army and compensate veterans played a large role in motivating Alexander Hamilton to begin developing the U.S. financial system.
The Chairman of the Joint Chiefs is tired of ignorant bullsh*t from people who don’t like to read - James Clark/Task & Purpose
"I've read Mao Zedong, I've read Karl Marx, I've read Lenin. That doesn't make me a communist."
"Arkansas Gov. Asa Hutchinson urged the Senate Judiciary Committee on Tuesday to eliminate sentencing disparities in cocaine-related cases, saying crack and powder forms of the substance are equivalent.
"Hutchinson, a former U.S. attorney and head of the Drug Enforcement Administration, told lawmakers that the double standard is harmful and has done 'disproportionate harm to communities of color.'"
China’s Rebalancing and Gender Inequality - Mariya Brussevich, Era Dabla-Norris and Bin Grace Li/VoxChina
"...we show that barriers that could emanate from labor market regulations, employer discrimination, and lack of affordable child and elderly care options increased over time. Our counterfactual analysis shows that reducing barriers to the level observed in an advanced economy such as the United States can narrow gender wage and labor force participation gaps by 5 and 15 percentage points, respectively. Accelerating marketization of services by increasing productivity of the market service sector (e.g., removing credit and labor market frictions and making it easier for women to achieve greater work-life balance) can further narrow the gender wage and labor force participation gaps, boosting aggregate output by 4.9 percent over the long run."
Below are some resources to start promoting and connecting people to the CTC. We’ll have more materials to share with you, including a CTC toolkit and a guide to the CTC Update Portal.
Get it Back Campaign Resources
- What's New about the Child Tax Credit in 2021?
- Guide to the IRS Non-filer portal: Includes step-by-step instructions with images.
- Getting Started with CTC Outreach: Describes the need for outreach and the different roles you can play.
- www.irs.gov/AdvCTC: IRS landing page includes links to the Non-filer portal, FAQs, CTC sign-up events happening in 12 cities, and the new CTC Update Portal.
- Data on non-filers: The Department of Treasury released zip code level data on eligible non-filers which can help inform your outreach efforts.
- ChildTaxCredit.gov: Available in English and Spanish, this site is designed to be a one-stop tool for people to learn about the CTC. Scroll to the bottom for an Excel link to the recent non-filer data.
Why Chicago should start a public bank - Daniel La Spata, Matt Martin, Robert Peters and Ameya Pawar/Chicago Sun Times
"Reuters examined the effective tax rates – reflecting the actual tax payments companies reported – of 52 of the largest U.S.-based multinational firms, and then compared them to the rates paid by these companies’ main overseas competitors. The U.S. companies paid an average effective tax rate of 16% in 2020 compared to an average rate of 24% paid by 200 foreign companies that the U.S. firms named as their competitors in filings."
Dynasty Trusts: How the Wealthy Shield Trillions from Taxation Onshore - Kalena Thomhave and Chuck Collins/IPS
Lloyd Austin backs removing sexual assault prosecutions from military justice system - Dan Lamothe and Alex Horton/WaPost
"Despite extensive pressure from Congress and advocates for sexual assault survivors, senior defense officials have long argued that it is in the military’s best interests to allow commanders to oversee sexual assault cases in their ranks. But statistics show that the military has failed to meaningfully address the situation."
What does “oversee” mean exactly that commanders can do? Arbitrate? Say ‘stop’? Devise punishments? Take away privileges? Observe? Defer? Ignore? Comment? Film? Critique?
These are the least safe Army posts for female soldiers: Fort Hood comes in at #1. - Haley Britzky/Task & Purpose
Supreme Court unanimously sides with former college players in dispute with NCAA about compensation - Dan Murphy/ESPN
Quote: Kavanaugh wrote a concurring opinion to underscore that while the court's ruling was narrow in this case, "the NCAA's remaining compensation rules also raise serious questions under the antitrust laws."
"All of the restaurants in a region cannot come together to cut cooks' wages on the theory that 'customers prefer' to eat food from low-paid cooks," Kavanaugh continued. "Law firms cannot conspire to cabin lawyers' salaries in the name of providing legal services out of a 'love of the law.' Hospitals cannot agree to cap nurses' income in order to create a 'purer' form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a 'tradition' of public-minded journalism. Movie studios cannot collude to slash benefits to camera crews to kindle a 'spirit of amateurism' in Hollywood. Price-fixing labor is price-fixing labor."
Comment: Some college sports are billion-dollar businesses. Under NCAA rules, coaches at state universities can make many times more than state governors while atheletes are limited to earning room, board, and subsidized education. Is that a fair split of profits between owners (taxpayers), managers, and labor?
Rep. Ken Buck Announces Several Bipartisan Bills Aimed at Regulating Big Tech - Madeline Leesman/Townhall
GOP congressman spearheads bipartisan bills adding teeth to anti-trust laws.
"Social workers, not check writers, address problems like substance abuse and domestic violence."
Valuable advice from someone with decades of experience running poverty programs now leading a Conservative think tank. But providing money to help raise kids and guidance from social workers are not mutually exclusive. Social workers can't provide a living wage. Money can't buy the skills and discipline needed to raise kids. Society can provide both types of help - and economize by targeting subsidies and services to people needing them the most. Many families about to receive child tax credits are well-off and don't need the money.
A College Grad Honored Her Parents With A Photo Shoot In The Fields Where They Worked - Vanessa Romo/NPR
The economy isn’t going back to February 2020. Fundamental shifts have occurred. - Heather Long/WaPost
"A new era has arrived of greater worker power, higher housing costs and very different ways of doing business."
"The PA said the Pfizer vaccine doses received from Israel were set to expire soon and did not meet required standards."
Was this really a 'win-win' deal? Why can't Israel -- or the U.S. government funding its military -- treat the Palestinians as human beings deserving equal dignity? Why not provide the people of Gaza -- who just had the crap bombed out of them -- the same vaccines we get without us getting something back? Instead, they are offered expiring vaccines in exchange for not getting better stuff later. That's how a nation with a superior bargaining position treats an underclass. And they know it.
The "chosen people" in Israel and Western countries can do better. Why not give people stuck at the bottom under poor leadership what we don't need free of charge? If we must have something in return, the U.S. could divert some of the $$ its sends to Israel for arms to cover the cost. No harm can result from helping them in this way and some good might.
Question: Which type of ethical belief system results in a healthier, more stable society: one based on tribal membership or one that applies to all people?
Note: don't care what you believe in. Treat other people fairly.
"What is more clear is what a lack of homeownership could mean for Americans. 'It’s creating a greater divide between the haves and have-nots,' Yun said. 'Homeowners are getting sizable wealth gain. Renters are getting left out.'”
Third Sunday - June 2021
Congress and the President did right to memorialize the end of American legal bondage. While most white collar workers can celebrate at home, it will be another work day for millions of essential workers. Next up: Independence Day and Labor Day. How much are they paying you?
"The foster-care system is there to fulfill a need — to help children who are in danger — and we shouldn’t ignore that danger just to make our spreadsheet columns come out even."
"A gas tax hike carries some enticements for liberal Democrats, encouraging car manufacturers to prioritize more fuel efficient vehicles while discouraging driving overall, which could help curb greenhouse emissions that exacerbate global warming.
"Yet the gas tax is also regressive, hitting low- and middle-income drivers the hardest, and liberals in the current infrastructure fight have roundly rejected the notion of raising it to help cover new spending on public works projects."
Good that she is against this because it's regressive.
The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid - Rachel Garfield, Kendal Orgera and Anthony Damico/KFF
A policy change that could help motivate states to fill the coverage gap involves Medicare. The feds could cut, or add to, Medicare payment rates based on states' uninsured rate or expansion of Medicaid (say in a range of +2% to -5%). Health care providers care a lot about what Medicare pays and have considerable influence with state lawmakers. This type of leverage could be simpler to apply and probably a lot less costly than other ideas now being considered.
Obamacare lives! Now, Democrats should do right by those who fell through its cracks. - Catherine Rampell/WaPost
Still learning - thanks to mom.
"The rare Chilean soapbark tree produces compounds that can boost the body’s reaction to vaccines."
Investment opportunity? Gates Foundation, for one, has supported vaccine development involving these types of rare adjuvants.
BROWN LEADS SENATORS IN INTRODUCING HISTORIC LEGISLATION TO UPDATE LONG-NEGLECTED SOCIAL SECURITY PROGRAM TO ENSURE OLDER ADULTS & PEOPLE WITH DISABILITIES ARE NO LONGER TRAPPED IN POVERTY
The SSI Restoration Act would:
Raise SSI's sub-poverty-level monthly benefits, currently $794 per month, to 100% of the federal poverty level--a 31% increase--and index them to inflation;
Update and index the assets individuals or couples may have up to $10,000 and $20,000, respectively. The current limit of $2,000 for an individual and $3,000 for a couple has not been updated since 1989;
Update and index SSI's income rules -- which have never been updated since the program was signed into law in 1972. These reforms will allow individuals to earn up to $399 a month from working, and up to $123 a month in assistance from other sources: including Social Security, veterans’ benefits, and pension payments without being subject to a benefit reduction.
These reforms will reward, not penalize, SSI recipients who want to earn additional income to provide for themselves and their families;
Eliminate the marriage penalty and increase the benefit for married couples to double the individual rate, to put marriage equality within reach for SSI beneficiaries; and
Eliminate benefit reductions that penalize beneficiaries who receive in-kind help from friends or family, such as groceries or a place to stay.
"Increasingly, Congress has directed funding away from service delivery to disability reviews that remove individuals from the rolls based on SSA's assessment of medical improvement...
"...disability reviews have now become ingrained in SSA's work culture, even at the expense of fulfilling its core mission as a benefits paying agency that keeps millions of elderly and disabled Americans out of poverty."
"With Lina Khan as chair, the FTC may have an anti-monopoly majority for the first Time in a generation. And Wall Street is nervous."
"Unlike many social questions, in other words, antitrust and related issues like trade cross party lines and are areas of consensus. That doesn’t make them unimportant, even though they aren’t often reported on CNN. Competition policy is a massively consequential area, and not just in the tech platform area, which is the centerpiece of current debates. Pretty much every part of the economy is full of concentrated power, whether pharmacy benefits managers, search engines, meat packers, or candy monopolists.
"Deploying antitrust, fair trade rules, and other competition policy can have huge impacts on prices, workers, innovation, and prosperity more broadly. While Biden is drifting a bit on some of his priorities, running straight into the buzzsaw of the Senate, on competition policy he just took a big step forward, and did so with conservative support."
Jobless Indiana residents sue governor for ending pandemic unemployment benefits early - Tami Luhby/CNN
Auckland chapter of New Zealand’s School Strike 4 Climate group admits racism and disbands - Pete McKenzie/Guardian
The chapter of the international movement said it was a ‘racist, white-dominated space’
Altruistic wokeness cancels itself. Back to school...
Birthing divisions: What’s wrong with replacing ‘mothers’ with the made up term ‘birthing people’? - NY Daily News
What's next: handmaids? Woke White House redefines parenthood... Happy Impregnators Day everyone!
"Pelosi has appointed a roster of eight Democrats that illustrate her desire to connect with different aspects of the fairness agenda: Among them are Rep. Marcy Kaptur of Ohio, who can speak for Rust Belt voters hit by globalization; Rep. Gwen Moore of Wisconsin, who will focus on the racial wealth gap; Rep. Angie Craig of Minnesota, who can represent concerns of family farmers; and Rep. Alexandria Ocasio-Cortez of New York, who is a voice for younger progressive voters and Hispanics.
"House Minority Leader Kevin McCarthy (R-Calif.) “plans to select members to serve on this select committee. Names will be announced in the near future,” said his spokesperson, Michele Exner."
What's news is that they are dragging their heels...Pelosi announced the new select committee on inequality 7 months ago. So, far conflict over these issues has been politically expedient for both parties. Hopefully, McCarthy will appoint members and the committee will come up with viable ideas on improving the lives of low-income people.
"Since COVID-19 is a respiratory illness, pulmonary health has played a major role in determining the severity of cases. People with worse lung health are at increased risk for hospitalization and death. And according to a new study titled “Socioeconomic Inequality in Respiratory Health in the US From 1959 to 2018” published in the journal JAMA Internal Medicine, class makes a bigger difference than it used to in determining lung health."
Percentage and Number of Children Living With Two Parents Has Dropped Since 1968 -Paul Hemez and Chanell Washington/Census Bureau
"Number of Children Living Only With Their Mothers Has Doubled."
Note that survey definitions have changed.
Often underserved by traditional schools, Black families are banding together to educate their children, sometimes with an unexpected funding source: the Koch family and other conservative donors.
A Yale professor interviewed the ultra-wealthy in Teton County, WY to find out what it’s like to be really, really rich
"There was, and there still is, a dwindling middle class. You have teachers, you have people in the police department. But a lot of those folks have been forced to move out of town. You have a huge nonprofit sector that, again, employs quite a few people, but it’s becoming harder and harder for those folks even to survive. A middle-class professional in Teton County would need to be a doctor or a lawyer. Then you have people for whom the threshold for what constitutes livable housing is lower; they might share a trailer with a couple of families. But on the whole, the middle class has largely been hollowed out.
"One ultra-wealthy person told me in an interview that he refers to Teton County as a “barbell community” — you have two ends of the spectrum and no middle. It’s not this extreme yet around the United States by any means, but it’s a picture of what the United States could look like if things keep accelerating. It shows in sharp relief what a community defined by inequality looks like."
North Korean defector says 'even North Korea was not this nuts' after attending Ivy League school -Teny Sahakian/Fox News
Hold on to your pronouns, comrades! Interesting video.
Deaths rose in Virginia’s mental hospitals last year, but COVID-19 wasn’t the prime culprit - Kate Masters/Virginia Mercury
Novavax says its Covid vaccine is 90% effective, plans to submit data to FDA in third quarter - Berkeley Lovelace Jr./CNBC
NVAX vaccine ships easily at fridge temp for beer. To be priced to play major role in vaccinating people in low-income countries.
Conflict of interest: at 8 am, NVAX shares = 25% of Poor Man's Hedge Fund, which supports work of this project. We don't take money from foundations seeking to influence content.
BTW, posting this article does not constitute investing advice. For that, we recommend the capitalist catechism: "By low, sell high."
"The Department of Labor Intentionally Hid Data that Showed its Proposed Rule Would Cost Workers Billions and is Set to Strip Struggling Tipped Workers of Protections Again."
Hope the new leaders at DOL have cleaned up this mess. BTW, the minimum wage for tipped workers, now $2.13 per hour, should be raised to at least half the regular minimum wage. Both should be indexed for inflation. See:
Analysis: Ways To Raise the U.S. Minimum Wage To Help Workers, Families, While Minimizing Negative Impacts
Thus spoke academia!
Sunday, June 13, 2021
Church leaders: Help us on how to tax the rich...If tithing were based on wealth instead of income, how much would you ask for? How much do you think you'd get? Why?
Dear upper-middle class (who run things): What if we limited total wealth to less than $1 billion? The focal point of the inequality debate would then shift downward -- closer to your net worth.
One of your favorite political narratives blames the top 1% for the the imbalance while painting the struggle to survive at the bottom in racial terms. This split view deflects attention from your own role in the inequality drama.
These businesses found a way around the worker shortage: Raising wages to $15 an hour or more - Eli Rosenberg/WaPost
"Most of the owners said the political debate in Washington about the labor shortage seemed to present a simplistic view of business challenges — none said that they believed unemployment insurance was solely to blame for hiring hurdles.
“'There’s a shaming that’s happening to working-class people,' said Schaefer, the owner of the D.C.-area hardware stores. 'Nobody talks about the fact that the economy is going to fall apart when a tech guy gets a $195,000-a-year salary with a 5 percent raise every year, or when lawyers are making $300,000. This conversation only happens when you’re talking about the people who make the lowest wages. And I think as a society, that’s just really insulting.'”
A quarter a dozen? Some businesses have upped the ante.
"Explaining the food of yesteryear doesn’t require exotic theories about culture and politics. It mostly requires understanding the economics of food production and distribution, and the path dependence of culinary choices."
Lisa Benson - Go Comics
One letter against targeting the rich. One for it. And one suggesting a graduated income tax.
Closing Medicaid Coverage Gap Would Help Diverse Group and Narrow Racial Disparities - Gideon Lukens and Breanna Sharer/CBPP
VA parent who survived Mao: Scholastic critical race indoctrination 'a replay' of 'cultural revolution' - Charles Creitz/Fox News
Speaking of cultural revolution, elites sitting at the top of American society should have to spend a year in jobs that essential workers do. Corporate executives, members of Congress, academics, doctors and lawyers might make better decisions if they knew firsthand how the bottom half lived.
For more on Mao's Cultural Revolution read:
The Black-White gap in multi-generational poverty - Scott Winship, Christopher Pulliam, Ariel Gelrud Shiro, Richard Reeves, and Santiago Deambrosi/Brookings
Distributional Impact of Tax Provisions in the Biden Administration's FY 2022 Budget Proposal - Tax Policy Center
Taxing Consumption Progressively Is a Better Way to Tax the Wealthy - Erica York and Garrett Watson/Tax Foundation
Sounds good but...
The analysts get credit for recognizing that consumption taxes are regressive -- impacting low-income people the most. But is a progressive consumption tax a feasible alternative? Exactly how would a car dealer know whether the person buying a pickup truck is a construction worker or high-income professional so that the latter could pay a higher tax?
Mad about how little rich people pay in taxes? Here’s how to get them to pony up. - Catherine Rampell/WaPost
"From journalists, to journalists: Why reporting on Palestine has to change."
"Professors raise their prices to capture cheap loans, while producing new Democratic voters."
Agree that academia has the power to absorb tuition subsidies in form of higher prices. However, the political assertion that most college grads are Democrats needs data to back it up. During the Vietnam War, most people assumed that college kids were predominantly left wing. Research showed that nationwide they were actually more conservative than their parents.
As home prices soar in unlikely places, the most vulnerable residents pay the price - Rachel Siegel and Andrew Van Dam/WaPost
"KINGSTON, N.Y. — Inside a Victorian house flecked with chipping white paint, 65 group home residents must suddenly find a new place to live, an unintended consequence of a Federal Reserve policy meant to save an economy in crisis.
"The group home —refuge for people with mental illness, disabilities and substance dependence — is closing after its owners agreed to sell the property this spring. Now, Mary Chisholm, who runs the home, is struggling to relocate the most vulnerable."
"Tormented By Voices But Is She Gravely Disabled? Part Two: Patty’s Skid Row Story"
"...corrupted democracies have all failed. Do you want the U.S. to be next?"
36 Million Families Are Getting Letters From the IRS About Changes to the Child Tax Credit - Kenadi Silcox/Money
"This year’s Child Tax Credit was expanded under the American Rescue Plan passed in March. It will provide families up to $3,600 per child under the age of 6 and $3,000 for all other children under 18, with half of the credit being paid out in monthly installments between July 15 and December 15."
Social Security Reform Should Eliminate Poverty Among the Elderly and Disabled - Eugene Steuerle and Karen Smith/Tax Policy Center
"Most Social Security reform proposals have focused on one goal: restoring the program’s long-run fiscal balance. Yet under all recent proposed restructurings we have examined—whether by Democrats or Republicans in Congress, in the presidential campaign, or by a bipartisan commission—the share of older adults and younger people with disabilities who live in relative poverty would rise in the future.
"This is upside down: given the substantial increase in benefits scheduled for future retirees under every one of these reforms, policymakers should first seize the opportunity to look at how Social Security reforms can alleviate poverty and, next, how to provide adequate protections for moderate income workers. Then, they can fight over whether to make the system solvent by raising taxes or slowing the growth in promised benefits for everyone else."
What If Low-Income American Workers Had Access to Wealth-Building Vehicles Like the Federal Employees’ Thrift Savings Plan? - Teresa Ghilarducci and Kevin Hassett
Inclusion in a well-run retirement savings/investment plan like the fed's Thrift Savings is critical for low-wage workers - but it is only one of two key changes needed. They also need a modest contribution from the federal government upon which they can build with their own savings. Some low-wage workers already have access to similar plans but have no money left over to save. The authors, who are associated with differing political camps, tap dance around the funding issue.
We advocate establishing a universal system like Thrift Savings and also redirecting some of the tax breaks for retirement savings now enjoyed by higher-income workers to those to make less:
"Including all workers in our retirement savings system requires two things: a universal tax credit and a secure place to invest it. Congress should be working on both."
"As you might expect, the benefits will accrue mainly to upper-income Americans, because they are more likely than others to have IRAs and 401(k)s in the first place — and because their account balances, on average, exceed those of lower-income people. The higher your income, the longer into retirement you can afford to wait before drawing on an IRA. Longevity varies directly with income, too.
"In short, this provision confers the bulk of its foreseeable benefits on the wealthiest — and healthiest — older Americans, and their heirs, while depriving the federal government of resources it could have used to help everyone else. The bill, which made it through committee unanimously, and a version of which enjoys bipartisan support in the Senate, also makes some needed reforms, such as encouraging more employers to enroll employees automatically in tax-advantaged savings plans through work. The proposed delay in mandatory withdrawals, however, confirms a sad Washington reality: Bipartisan policy is not necessarily good policy."
Key point: Females of a one-gender species can reproduce by cloning themselves.
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax - /ProPublica
"Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.
"The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system...
"According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%."
The check please!
Biden Proposals Would Significantly Expand Benefits Administered Through the Tax Code - Erica York/Tax Foundation
“Employers are becoming much more cognizant that yes, it’s about money, but also about quality of life.”
"Life in a modern boomtown is living on the frontier but with a smartphone. 'Capitalism on crack' is the way historian Clay Jenkinson referred to it – everyone taking what they can get, as fast as they can.
"I spent nearly a year in an oil boomtown: from summer of 2013 to winter of 2014, I worked in the Bakken oil patch out of Williston, North Dakota. At the time, politicians, geologists, and much of the national media claimed the town would be booming for decades to come. They were all wrong."
Inequalities At Work And The Toll Of COVID-19 - Rebecca Wolfe, Kristen Harknett and Daniel Schneider/Health Affairs
"The COVID-19 pandemic has laid bare existing inequalities in workplace exposure to health risks and economic insecurity. Policy action is needed to protect workers’ health during the pandemic and to support worker empowerment and equitable opportunities in the future."
- Workplaces shape risk for exposure to COVID-19 through on-site safety practices, including the provision and required use of personal protective equipment, as well as protective policies such as paid sick leave and the flexibility to work from home.
- More than one in every five US workers has no paid sick leave. Recent expansions of paid sick leave coverage still exclude many workers. Low-wage workers are far more likely than their higher-paid counterparts to lack paid sick leave but are the least able to afford to take unpaid time off from work when ill.
All Workers Should Have A Few Paid Sick Days. The President And Congress Can Make It Happen - Health Affairs
"The Amazon H2Q fight in 2019 woke up the anti-monopolists in New York. Now they are moving forward with a new stronger trust-busting law."
"Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market."
When Parisian Prisoners Were Offered Freedom if they Agreed to Marry Prostitutes and Move to Mississippi - Stephanie Schoppert/History Collection
Today, the bank/investment company might be too big to fail. This guy was way ahead of his time.
Why are we sending $4 billion a year to help another country enforce the superiority of a particular ethnic/religious group? The Constitution forbids the U.S. government from tampering with religion. Would a U.S. political regime have a right to exist if it conferred more rights to a particular religious or ethnic group? Racist policies invite rebellion.
"Teaching was in his blood, and from an early age, Sen was struck by the stark economic inequities he saw all around him under the British raj. Identifying and understanding the causes and effects that inequalities, like those surrounding poverty or gender, had on people’s lives would become a lifelong intellectual lodestar for the political economist, moral philosopher, and social theorist." .....
"'While the assailants and victims came from different religions, Hindu or Muslim, the victims were all from the same class, or nearly all. They were poor laborers. Because they didn’t have any shelter at home, it was very easy to break into their homes, very easy to find them on the street, like this person who came to our house for help. Similarly, there would have been Hindu laborers being assaulted by Muslim murderers all over the city. It came suddenly around 1943, 1944, and after 10 years or so, it was gone. India was divided.'"
Sunday, June 6, 2021
Opportunity for new China/U.S. exchange program?
I’m a Billionaire Politician, but Here’s Why You, a Regular Person, Have to Save the World - Meghana Indurti and Rima Parikh/New Yorker
'A dinosaur' – the pandemic exposed longstanding flaws in Virginia's unemployment system - Michael Martz/Richmond Times-Dispatch
"the agency had processed just 2.4% of complex cases within 21 days through the end of March. The average length of claims under appeal was 247 days - more than eight months, compared to the federal standard of less than a month."
Non-farm job openings - U.S. Bureau of Labors Statistics
"Policymakers should establish federal standards that narrow disparities among states and create a meaningful floor for who is eligible for jobless benefits, the share of wages replaced, and the maximum number of weeks of benefits a worker can receive. These are critical initial steps for creating a robust 21st century UI system that gives unemployed workers in all states the financial assistance they and their families deserve when they lose a job and need to find another."
A Good Worker Is Hard to Find: The subsidies for not working continue to hurt the labor market. - WSJ
"It’s also worth noting that this is how a universal basic income is likely to work in practice. The threshold wage or salary required for workers, especially the young and unskilled, to enter the workforce would rise considerably. Add commuting and other costs as well as lost leisure, and more people will choose not to work."
U.S. leisure and hospitality pay surges to a record. Now will workers come? - Jonnelle Marte and Ann Saphir/Reuters
Court orders Long Island contractor to pay $500K to 69 employees following US Department of Labor investigation, litigation - DOL
Explainer: What is a global minimum tax and what will it mean? - David Lawder and Leigh Thomas/Reuters
"HOW WOULD A GLOBAL MINIMUM WORK?
"The global minimum tax rate would apply to overseas profits.
"Governments could still set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could "top-up" their taxes to the minimum rate, eliminating the advantage of shifting profits."
Would a 15% minimum be fair? Should some firms pay less? 10%? On what basis? Size? Market dominance? Financial health?
Top tax frustrations for Americans: The feeling that some corporations, wealthy people don’t pay fair share - and
The Fed’s easy credit policies are widening wealth inequality as they fuel persistent home price inflation - Edward Pinto/AEI
"Condoleezza Rice, who served as President George W. Bush’s national security adviser and later secretary of state, said former President Trump was successful as a politician partly because of his ability to connect with Americans who felt left behind.
"As The Hill reported, Rice spelled it out in an interview on “The Carlos Watson Show” this week. “What really struck me, and maybe it’s because I’m a political scientist, is that the conditions that produced a populist leader, who had never been in government before, was something I think a lot of us had not paid much attention to, frankly.”
" “He touched the nerve of people who felt left out by globalization, who felt diminished by elites,” she added. “That just assumed that the conversation was the conversation they were having, not the conversation that people who’d been left behind were having.”
"Trump reached out to voters, Rice said, by telling them “you contribute too, and they’ve forgotten you. They look down on you.” "
"Amid surging poverty, one of the world’s worst Covid outbreaks, months of political crisis and rampant anti-left scaremongering, Peruvians will choose the fifth president in as many years."
In Peru, being president comes with a get-out-of-jail card.
In Peru’s pandemic election, a rural schoolteacher challenges a political dynasty - Lucien Chauvin and Anthony Faiola/Washington Post
"Researchers found that sharp declines in food shortages, financial instability and anxiety coincided with the two most recent rounds of payments."
Activists are pressuring Walmart to add employee representatives to its board of directors - Aleeya Mayo/Business Insider
"Richard Brown wants to get California’s SEIU out of politics and negotiate more aggressively."
"The Biden administration would much rather discuss white criminal behavior in Tulsa 100 years ago than black criminal behavior in Chicago, Baltimore or St. Louis today. Likewise in his Selma address, Mr. Obama invoked high-profile police shootings, “unfair sentencing” and “voter suppression,” giving the impression that little had changed in the past 50 years, his own election and re-election notwithstanding. Liberals focus on this history of black suffering rather than success because it helps Democrats get elected and activists raise money. What’s less clear is how any of this helps the black underclass improve its situation."
Blacks come in more than one political color.
What Price Is Right? - Cass Sunstein - New York Review
"Both government regulators and private companies regularly assign a monetary value to human lives. A new book argues that the price is too low, and can entrench inequalities."
"This rapid radical reduction in the price of PV solar is a story about Chinese industrial might backed by American capital, fanned by European political sensibilities and made possible largely thanks to the pioneering work of an Australian research team."
Cleaner technology that low-income people can afford is the key to reducing carbon pollution, global warming, and sea-level rise.
Is Newsom trying to be Robin Hood? What his budget means for wealth inequality in California - Jeong Park and Hannah Wiley/The Sacramento Bee
"Newsom’s budget has a mix of short-term stimulus for working-class households and long-term expansions of services like universal pre-kindergarten for 4-year-old children.
"The budget puts $8 billion of the surplus for the $600 stimulus checks which, along with $4 billion the state has already given to low-income residents, represents a very significant transfer of the wealth, Shanske said. More than $7 billion is also proposed for rent and utility relief."
You Just Paid Your Taxes. Here’s How the Superrich Avoid Them - And how Joe Biden’s proposals might address some of that. - Michael Mechanic/Mother Jones
"The disparity in tax rates for work earnings versus investment earnings, which Biden hopes to eliminate, has been a major factor in the rapid growth of the wealth and income gap in recent decades. The disparity also drives financial behavior by wealthy individuals and corporations alike. It is why, for example, CEOs of large public corporations typically take home twice to three times their base salaries in preferred stock, stock options, and other non-wage compensation."
"A new antitrust case shows that Prime inflates prices across the board, using the false promise of 'free shipping' that is anything but free."
Sunday, May 30, 2021
Beijing Mourns “Father of Hybrid Rice” Yuan Longping as it Censors Critical Remarks - China Digital Times
"In the wake of the famine came the Cultural Revolution, a decade-long period of upheaval in which perceived foes of Mao were persecuted or killed. Mr. Yuan was targeted as an intellectual but saved by an official who 'recognized the value of his research,' according to historian Sigrid Schmalzer’s book “Red Revolution, Green Revolution” (2016). He was later 'sent to a coal mine to "temper" himself and reform his thought,' Schmalzer wrote, and freed after a pair of students vouched for his character...
"In recent years, Mr. Yuan and his team developed new varieties of salt-tolerant rice. Amid suggestions that he engineer rice with improved taste or texture, he said he remained focused on ensuring there was enough food to go around. He dreamed of creating 'rice crops taller than men,' he said, in which 'each ear of rice was as big as a broom and each grain as huge as a peanut.'
"In his dream, he told state media, he 'could hide in the shadow of the rice crops with a friend.' ”
"It's not often that a book comes out that rewrites a country's history. But that's the case with Tombstone, which was written by a retired Chinese reporter who spent 10 years secretly collecting official evidence about the country's devastating great famine. The famine, which began in the late 1950s, resulted in the deaths of millions of Chinese.
"For Yang Jisheng, now 72, the famine hit home while he was away. He was 18, busy preparing a newspaper for his boarding school's Communist Youth League, when a childhood friend burst into the room and said: 'Your father is starving to death.'
"Yang rushed home to find a ghost town — no dogs, no chickens, even the elm tree outside his house was stripped of bark, which had been eaten."
CNN's Abby Phillip reports on the 100th anniversary of the Tulsa race massacre, where a predominately Black community in Oklahoma was attacked in 1921 making it one of the most destructive racial killings in history. CNN Films' "Dreamland: The Burning of Black Wall Street" premieres Monday at 9 p.m. ET.
Covid pushed millions worldwide from the middle class to poverty. One man is trying to work his way back. - Anthony Faiola and Megan Janetsky/WaPost
It’s Time to Be Worried About Inflation: Biden’s budget plan is almost guaranteed to overheat the economy. - Desmond Lachman/Bulwark
Based on the administration’s estimates, CRFBanalysis shows that under the budget:
Debt would rise from 100 percent of GDP at the end of FY 2020 and a record 110 percent at the end of 2021 to 114 percent by 2024 and 117 percent by the end of FY 2031. In nominal dollars, debt would grow by $17 trillion, from $22 trillion today to over $39 trillion by the end of FY 2031.
Budget deficits would total $14.5 trillion (5.1 percent of GDP) over the next decade. Annual deficits would fall from $1.8 trillion (7.8 percent of GDP) in FY 2022 to $1.3 trillion (4.6 percent of GDP) in 2027 before rising to $1.6 trillion (4.7 percent of GDP) by 2031.
Spending and revenue would total 24.5 and 19.3 percent of GDP over the coming decade, respectively. This would be higher than the administration’s baseline projection of 22.7 and 18.0 percent of GDP, respectively, and far above both the 50-year averages of 20.6 and 17.3 percent of GDP.
Preliminary data show CEO pay jumped nearly 16% in 2020, while average worker compensation rose 1.8% - Lawrence Mishel and Jori Kandra/EPI
"Lockheed, the nation’s largest defense contractor, sends key executives on a mission to deconstruct their 'white male privilege.' ”
"Why Does Our Government Keep Denying How Prevalent Schizophrenia Is Among Americans? The Answer: $$$" - Pete Earley
Depending on which numbers are right, there are between 6 and 25 people with schizophrenia serving in Congress (give or take a margin of error). Schizophrenia can take several forms including 1) hearing voices or seeing things that can't be perceived by others, and 2) developing a system of beliefs based on premises that are not consistent with reality...Guess the number could be higher.
The Washington Nationals play baseball a mile from the Capitol. With Covid on the decline, the crowd noise is getting louder. What are the voices telling you?
The Virginia Interfaith Center for Public Policy has spearheaded the creation of multiple Living Wage Certification programs across the Commonwealth.
In the absence of adequate minimum wage standards, advocates for low-wage workers in Virginia offer a voluntary living wage certification process. Interestingly, the program, in effect, suggests wage corridors varying by regional and local economic conditions. We have advocated that Congress take a similar approach to increasing the minimum wage. Providing some flexibility allows higher-cost areas to set a higher minimum wage without penalizing employers and workers in lower-cost areas.
Analysis: Ways To Raise the U.S. Minimum Wage To Help Workers, Families, While Minimizing Negative Impacts
"69% of NRA members back the expanded background checks for firearms sales."
Equation: MOTIVE + MENTAL STATUS + TYPE OF WEAPON = MASS KILLING ...
If we don't like the result, which variable is it possible for Congress, or the market, to regulate?
By the way, sometimes it's hard not to wax nostalgic for former President Trump and his policy ideas - particularly with the news of the latest mass shooting. He was an original thinker and true inspiration for satirists and political analysts:
"The Congressional Budget Office estimates that H.R. 3, Elijah E. Cummings Lower Drug Costs Now Act, prescription drug price negotiation legislation which is under debate in the House could lower government spending on Part D by $456 billion over a ten year period, but cautioned the estimates are uncertain, especially if price negotiations are implemented differently that the CBO's interpretation."
Hawley, Sanders decry $10B 'bailout' to Jeff Bezos tucked into bill to rebuff China - Morgan Phillips/Fox
"The measure would aid Bezos' Blue Origin, which lost out on a federal contract to Musk's SpaceX"
Lovely to see Rs and Ds agreeing on something - especially opposing bailout $$ for Bezos.
Disclosure: The poor man's hedge fund, which supports this site, includes shares of tech companies, including Amazon, that profit from monopoly power. We also support antitrust action to make technology markets more competitive. If monopolies are allowed to exist, all Americans including those with low- and middle-incomes, can benefit by owning shares. Share the wealth.
Low-wage, low-hours workers were hit hardest in the COVID-19 recession - Elise Gould and Melat Kassa/EPI
What Can We Learn About Automatic Enrollment Into Pensions From Small Employers? - Jonathan Cribb and Carl Emmerson/National Tax Journal
Congress should set up a universal system to plug the gaps we have now. See:
Half of Americans have no retirement savings — here’s how Congress can look out for them - Examiner op-ed
The IRS To Start Automatically Sending Monthly Child Tax Credit Payments July 15 - Kemberley Washington/Forbes
With inequality on the upswing, U.S. families with kids will get monthly cash infusions this year and at tax time in 2022. The fate of the expanded child tax credit - and who may qualify for how much - could be pivotal issues in the mid-term elections. How would the political dynamics change with a drop in record-high equity values? If Congress were to extend the new child tax credit system before the elections? If Congress let the new amounts expire at the end of 2021?
Source: Gabriel Zuchman
"Since Forbes calculated net worths for its 2020 World’s Billionaires list at the worst of the market crash in March 2020, Bezos has gotten more than $75 billion richer, compared to gains of nearly $127 billion for Musk and $111 billion for Arnault. Bezos’ net worth peaked at a staggering $200 billion on two occasions: first in August 2020 and again late last month in April 2021."
As the impact of the stimulus wears off, inequality is rising again.
"The index is showing that without another lifeline lower-income Americans could be in for a difficult 2021, which would challenge the lofty growth expectations economists and asset managers have laid out for this year."
Number of 401(k) and IRA millionaires hits record one year after Covid, Fidelity says - Jessica Dickler/CNBC
Amid the pandemic, some people can’t afford rent, others became 401(k) and TSP millionaires. - Michelle Singletary/WaPost
"More than 7 million households are behind on rent, according to the Census Bureau. Meanwhile, average retirement account balances reached record levels."
"The coronavirus pandemic has the potential to lead to an increase in inequality in almost every country at once, the first time this has happened since records began. ...
"Over two million people have died, and hundreds of millions of people are being forced into poverty while many of the richest – individuals and corporations – are thriving. Billionaire fortunes returned to their pre-pandemic highs in just nine months, while recovery for the world’s poorest people could take over a decade."
Teen brings newborn baby to NJ restaurant, leaves baby with stranger: ‘It broke my heart’ - Jay Dow/Nexstar Media Wire
"Restauraunt owner Aguilar said he’s grateful he was in the right place at the right time.
"'I’m glad that she chose us, because she could have chosen any other option,' he said — options he didn’t want to think about. 'But instead, she said — as a 14-year-old girl who had the mental capacity to come in and say, you know what — this baby needs a chance.'
"The baby was taken to a local hospital, and is healthy."
"Fueled by government largesse, China’s electric-vehicle sector has raced ahead of America’s, sparking fears that the United States has fallen dangerously behind its chief rival in a crucial future industry. China’s “state capitalism” (Beijing prefers “socialism with Chinese characteristics”) is rewriting the rules of how countries and companies compete in the global economy."
"Biden’s policy to use less affluent Americans’ money to entice more affluent Americans to buy EVs is only one of the contemplated regressive policies by which his administration would transfer wealth upward.
"Another such policy would cancel student debts for some of the fortunate minority of Americans who, having college degrees, will likely enjoy lifetime earnings significantly higher than those of the less fortunate majority."
"A bipartisan coalition has introduced legislation to keep Social Security and Medicare solvent."
Not really...Typical manuveur when Congress wants to be seen moving forward on a difficult issue while avoiding action for as long as possible: create an elongated process with deliberation delegated to a committee or committees within a committee...
Book Review: "Goliath: The 100-Year War Between Monopoly Power and Democracy" by Matt Stoller - Kyle Sammin/National Review
Also: "No Going Back: The power and limits of the anti-monopolist tradition." - Gabriel Winant/The Nation
Poll: Nearly 1 in 4 Americans Taking Prescription Drugs Say It’s Difficult to Afford Their Medicines, including Larger Shares Among Those with Health Issues, with Low Incomes and Nearing Medicare Age - KFF
...To have and have not...
Hospitals Serving The Poor Struggled During COVID. Wealthy Hospitals Made Millions. - Laura Sullivan and Huo Jingnan/Frontline/NPR
FRONTLINE and NPR investigate the growing inequities in American healthcare exposed by COVID-19. THE HEALTHCARE DIVIDE examines how pressure to increase profits and uneven government support are widening the divide between rich and poor hospitals, endangering care for low-income populations.
Go to minute 35:00 for critique of private equity, which has doubled in health care over the past decade:
"Private equity's business model is 'perfect' for hospitals...Buy it. Lien it. Leverage it. Sell it." 20% ROI. What's left?
Types of Supplemental Payments:
Fee-for-Service (FFS) Supplemental Payments: FFS Medicaid payments to providers that are separate from, and in addition to, the payments for services rendered to Medicaid enrollees. These payments may be, but are not required to be, tied to Medicaid services. Often, providers receive supplemental payments in a lump sum. (For more information, see "FFS Supplemental Payments.")
Disproportionate Share Hospital (DSH) Supplemental Payments: Statutorily required supplemental payments to hospitals and mental health facilities treating large numbers of low-income patients. (For more information, see "Disproportionate Share Hospital Payments.")
Non-DSH Supplemental Payments: Supplemental payments not tied to a specific statutory or regulatory purpose that can be made to different providers, including hospitals, nursing facilities, and clinics. For some providers (e.g., physicians), there are no federal regulations for the non-DSH supplemental payments. However, for certain institutional providers, federal regulations specify upper payment limits (UPLs) that are what Medicare would pay for the same or comparable services. (For more information, see "Non-DSH Supplemental Payments.")
Managed Care Pass-Through Payments: An amount added to the payments states make to the managed care organizations (MCOs) (i.e., capitation rates) that MCOs are directed by the state to make to providers. (For more information, see "Managed Care Pass-Through Payments.")
Section 1115 Waiver Supplemental Payments: Supplemental payments that states would not be permitted to make under authorized Medicaid rules but which the Centers for Medicare & Medicaid Services provides Section 1115 waiver authority to allow. The two main types of Section 1115 waiver supplemental payments are uncompensated care pool payments and Delivery System Reform Incentive Pool (DSRIP) program payments. (For more information, see "Supplemental Payments Through Waivers.")
In the innards of the Medicaid payment system, some providers and states pan for dollars while others have the expertise to mine them.
"In 1896, the Supreme Court officially sanctioned 'separate but equal.' Harvard Law School Professor Kenneth Mack explains what the shameful decision meant, and why it still matters in 2021."
New Solidarity Among Palestinians Creates Fresh Challenge for Israel - Yaroslav Trofimov and Felicia Schwartz/WSJ
2018 Family and Medical Leave Act (FMLA) Surveys: Findings on Leave-Taking Behavior - US DOL/YouTube
Low wage workers are much less likely to get paid leave.
Ruins of buildings destroyed in Israeli bombardment in the northern Gaza Strip. Mohammed Salem/Reuters
U.S. tax dollars hard at work on Gaza infrastructure.
Most nursing homes faced multiple, persistent outbreaks of COVID-19 among residents and staff, GAO reports - Dave Muoio/Fiercehealthcare
The most likely vector: staff, often working in more than one facility. Why can't the long-term care industry find it within itself to support 5 paid sick days a year? Many don't provide it. A case of culture trumping logic and business sense?
Two farmers stand in their soybean field in Parchman, Miss. Adrian Sainz/AP Photo
"Ongoing controversy and distrust: The program drew from banking-industry groups that have pushed for changes they say are needed to offset revenue losses that lenders would face due to early loan payoffs. It has also been challenged by conservative lawmakers who say it amounts to reverse discrimination...
" “It’s hard for me to believe they are going to forgive a $150,000 loan for a farmer just because it's the right thing to do,” said Travis Cleaver, a Black farmer from Kentucky who got a letter notifying him he was eligible. “Even if we get the debt relief, we need to change the program so new farmers can also purchase farms.” "
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
"President Joe Biden’s plan to inject $4 trillion of social and capital infrastructure spending into a $21 trillion economy could help many people take care of their families. But there are also major economic and political downsides. These risks could be reduced, and the proposal’s value increased, by putting Social Security on the table and targeting new social spending to people most in need..."
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?...
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
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