The Rich get Richer: Income Inequality in the US

The United States has a wealth distribution problem. 80 percent of the wealth created in the United States in 2017 was created by the top 1 percent of earners. That’s insane. What’s even more insane is that top one percent of earners now have more wealth then the bottom 90 percent combined.

And yet as a country we seem to be okay with this fact. We seem to be so okay with this fact that we decided to exacerbate the problem by cutting the top tax brackets from 39.6 percent to 37 percent. Even more we cut the corporate tax rate from 35 percent to 21 percent, in another move that primarily benefits the top earners.

That’s even though income disparity in the United States was already getting worse, not better, before the tax cuts. Top earners now make 90 percent more than they did in 1963, while the bottom only saw their pay increase by 10 percent over that same period. That’s an insane income disparity statistic that we shouldn’t be okay with.

Even worse, the bottom 10 percent of Americans were, on average, 1,000 dollars in debt in 2016. That’s compared to having no wealth, and no debt, in 1963. If you were in the middle (50th percentile) you doubled your wealth in that same span. But if you were in the top 10 percent it increased 500 percent, and those in the top 1 percent saw it increase by 700 percent.

What’s that all mean in one simple statistic? In 1963 the top earners had six times more wealth then the average American. In 2016 they had 12 times the wealth. It’s a problem that is getting worse not better.

We’ve been taught that if you keep your head down and work hard you can claw your way up to the top, but the truth of the matter is if you keep your head down and work hard, you’ll be lucky to claw your way out of debt. That’s what the statistics are showing us.

Income disparity like we have in the United States is crippling for an economy, it stagnates growth and increases the government’s indebtedness. Something needs to be done. We start by identifying who the one percent are.

To be in the top 1 percent of all earners your household must be bringing in a minimum of 481,000 dollars a year. And while that’s no number to sneeze at, it pales in comparison to the top .01 percent of earners, which bring in 35.1 million dollars a year, and the top .001 percent of earners which bring in 152 million dollars a year.

That’s compared to the average American household, those in the 50th percentile, that make just under 40,000 a year. I would imagine that most Americans tend to believe that more than half the households in the country make 40,000 a year, but that’s part of the problem.

We are led to believe that the wealth in our country is better distributed then it is. But the truth of the matter is, as time goes on income inequality keeps getting worse, and that’s a trend we just can’t afford to continue. We need to ensure that income inequality doesn’t get any worse then it is, or else we can rest assured that our economy, and our country, is going to suffer. dlocked0

The GOP tax scam: returns are finally waking Americans up

Photo Credit: Nancy Pelosi

As early tax filers find out how much they are getting refunded, or paying to the government, this tax season, they are finding out the cold hard truth of the GOP tax plan. The tax plan was never intended to benefit lower and middle-class Americans, it was a plan designed exclusively to benefit major corporations and the top 1%.

The fact that the plan was just a massive tax break for the top 1% and mega corporations only becomes more absurd when you consider that the country is 22 trillion dollars in debt. Still you would think that after all the GOP’s bluster, lower and middle-class citizens should see some kind of increase on their tax returns, right? Wrong. Tax returns are down for early filers, with filers getting 8.7 percent less then they received in 2018.

On top of that, 4.6 million people that got a refund last year, will not get one this year. Instead, most of them will end up paying the government money this filing season, even though they have never had to do that before.

The common argument that gets thrown in the face of those complaining about their lack of tax returns, or newly incurred indebtedness, is that their weekly or biweekly paychecks went up throughout the year, thus justifying the lower returns. However, this response reeks of the same sentiment behind the comments of then Speaker of the House Paul Ryan when he Tweeted this in the beginning of 2018:

But how dare you not put that extra $1.50 a week into your savings account because they are going to take $1.00 of it back when you file your taxes! How did you not realize that when the GOP was slamming it down your throat how lucky you were to have them in office since you were getting such a great tax break that you needed to save it all because your refund was going to get slashed?

It’s just more proof that this tax plan was never intended to help the lower or middle class, it was all about giving breaks to mega corporations and the super-rich, which is why a company like Amazon, that made over 11 billion dollars in 2018, still ended up getting a refund of over 100 million dollars. That’s all thanks to the GOP tax plan.

Meanwhile that Costco membership was paid for. Well no it wasn’t, as this tax filing season has shown. Don’t be fooled this tax plan wasn’t for you or me. It was for the top 1%, and this tax season is only making that more and more clear.

Amazon and Taxes: Why you should be IRATE

If President Donald Trump was truly worried about working for the American people, the first thing he would have done after getting elected is to start to close some of the loopholes that major corporations use to avoid paying federal income taxes. It’s something that he has a lot of experience in, he’s run these mega-corporations, he’s used these loopholes, so he knows how to close them.

Instead, he expanded those loopholes resulting in corporations like Amazon being able to pay ZERO dollars in federal income taxes for all of 2017 and 2018. To make matters worse, it’s estimated that Amazon not only didn’t pay any federal income taxes in 2017, but it’s estimated they received a $137 million-dollar REFUND.

That’s right, when Amazon filed their taxes in 2017, the government wrote THEM a check, that’s even though they brought in 5.6 billion dollars in PROFIT in 2017, but that wasn’t enough, clearly, we needed to send them another 137 million dollars. I mean, what could Jeff Bezos do with a measly 5.6 billion dollars? The poor man’s company clearly deserved a refund.

Then after getting a tax refund in 2017, what did Donald Trump and the GOP do for mega corporations in their new tax plan? They cut the corporate tax rate from 35 to 21 percent for 2018 and beyond. In the minds of President Trump and the GOP, companies like Amazon were paying too much, and they needed a break.

What was the result? Despite Amazon almost doubling its profits from 2017 to 2018, to a whopping 11.2 billion dollars, Amazon still got another check from the federal government, this time for 129 million dollars. If it wasn’t for all the federal income tax loopholes, that President Trump and the GOP allowed to stay in place, Amazon would have paid 6.146 billion dollars MORE then it did in taxes over the last two years.

If you’re still wondering why President Trump doesn’t want to reveal his tax returns, it’s because of loopholes like this. The mega rich don’t pay taxes, they find loophole after loophole so they can hoard their billions, then they turn around and claim that they are paying too much, to try and get further tax breaks.

It’s about time we say enough is enough, and demand that these major corporations pay their fair share, instead of giving them hundreds of millions of dollars every tax season.

Defense spending and tax increases: what we need to do to balance the budget

moneyIn case you’ve missed it, the United States is going broke. The current national debt is at 22 trillion dollars, with a national deficit of nearly 1 trillion dollars. With our overall revenue at just under 3.5 trillion dollars a year, it would take us 7 years with the government spending ZERO dollars to just break even.

The bad news, the GOP, who historically has declared themselves the “fiscally conservative party”, has reneged on their promises and shown their true colors over their last two years in office. They have shown that they are anything but fiscally conservative, ballooning the deficit, which was down to 500 billion dollars during the last year of the Obama presidency.

Still with the debt so high what must we do to begin to claw our way out? We need to do the same thing every family does when they realize they are spending too much, decrease spending (budget cuts), increase revenue (taxes), or in this case both.

When you look at the budget, the biggest discretionary spending cost in the United States by far is defense spending (i.e the military). In 2018, the military had a budget of just under 700 billion dollars. That is by far the most any country spends in the world, even when compared to that countries GDP.

What the United States needs to do is start relying on it’s allies more when it comes to national defense and pushing its global interests. Currently the United States GDP is roughly equal to all its NATO allies combined, however, when it comes to defense spending the United States is accountable for close to 72 percent of all NATO defense spending. That means while we are currently spending 700 billion dollars a year, we should be spending only 480 billion dollars a year.  

The United States cannot afford to do this. We need to reign in our defense spending and force our allies to pay their fair share, if not they will gladly let us run our country into bankruptcy as they enjoy the benefits of our free defense services. The only way that they will ever start to pay their share is if we stop covering for them. We need to cut our defense spending, and then the next time Russia, China, North Korea, Syria, or a multitude of other bad actors misbehave, look to NATO to respond.  

Second, we need to increase taxes. It’s the only way to even come close to balancing the budget. While every politician in Washington knows this, the GOP was willing to mortgage the future of the country for a short-term political gain when they passed a massive tax cut in 2017. To make matters worse those tax cuts disproportionately benefited corporations and the super-rich, the same groups that are being taxed at historically low rates, when our country has a larger national debt than ever.

Alexandria Ocasio-Cortez’s proposed 70 percent tax on income over 10 million dollars a year, would bring in an additional 72 billion dollars annually (7% of our national deficit, or 14% if we reverted back to Obama era spending) and that’s just by returning the top marginal tax rate to a figure that it was always at before the 1980’s. There are ways to get our spending in check without catastrophic consequences if we selectively target our tax rates like most European countries do, but we need to do it now before it’s too late.

This country needs to elect politicians that are truly fiscally conservative, those that recognize defense spending needs to come down and taxes need to go up. Something that those in red refuse to admit.