According to one news story this morning Prez O'bama will again make income inequality a major issue in his upcoming State of the Union message. The fact that there is growing income inequality is irrefutable....the rich are indeed getting richer. The question is what, if anything, can be done about it?
I'm a compassionate capitalist. In theory I don't believe there is a lock on the door that prevents anyone from getting ahead. But facts say that it IS becoming harder, and IMO that's because there are special laws and tax advantages the government has granted to some at the expense of others. (Example: Allowing tax deductions for companies to shut down US facilities and move them overseas.)
In other words, the rich are to a large extent getting richer NOT necessarily by their hard work, but by the wink and nod they've been given by the government.
Consider this: In 2008 69% of corporations paid NO corporate income taxes at all, up from 24% in 1986. Successive administrations, both Democratic and Republican, through their policies and favors dispensed, have given special help to SOME businesses/industries (and individuals, too), primarily those who lobbied the hardest and made the largest political campaign contributions.
Their shareholder's "windfall" wasn't the result of working any harder, but due to government largess. If your company is still paying taxes, then you are at a competitive disadvantage. In other words, those who paid taxes subsidized those who didn't.
We need a level playing field, one where government can't designate winners and losers. That's what is happening now with special tax advantages and subsidies for some at the expense of others. Income inequality can largely be addressed by simply scrapping the old tax code (for both corporations and individuals) and replacing it with one that is fair to all. As always, the devil will be in the details.
*"Blasphemy!" said one fat cat to another*
Your ultimate success or failure will then be largely in your hands. Work hard, work smart....you thrive. Slack off....you lose. No headwinds, no tailwinds.
S
There has also been a shift in the job market. The brokerage industry used to have thousands of clerical positions filled by high school grads. The pay was not great, but it was minimum wage with opportunity to advance. These positions have been automated along with manufacturing jobs which required mostly brawn not brains. It seems there are manufacturing jobs today but many require more advanced skills. Perhaps we should make lower education changes which better address the new job market. And yes, where the fat cats are given an unusual advantage that does not benefit anyone else, fix it...good luck with that, but we should at the very least try.
ReplyDeleteThe above should be "but it was well above minimum wage"
ReplyDeleteI can't change anything by myself and I don't think folks will look outside of their immediate lives to worry about making a difference. Nice thoughtful post.
ReplyDeleteThe United States is only called the land of opportunity because other countries are so much worse at creating environments where people can lift themselves out of poverty. Societies since the dawn of time have fallen when their middle class disappeared. This happened to the Egyptians, the Romans, the British and now us.
ReplyDeleteWell said!
ReplyDeleteWell said but good luck with Congress ever doing anything meaningful to simplify the tax codes and make things approach income equality. Just ain't going to happen.
ReplyDeleteI agree....Congress is highly unlikely to bite the hand that feeds it. Damn them!
ReplyDeleteThis country used to be considered the land of unlimited opportunity. Anybody who worked hard and had a skill could make something of him/herself. This is no longer the case. I recently read an article that described how difficult it is to get out of poverty here. It was easier in Great Britain to cross the line into a higher socio-economic class - a country that was always knows for its rigid class structure.
ReplyDeleteThe IRS is a criminal, thug organization kept in place so criminal thugs can do what criminals do. It has to be scrapped, and whatever code is in place ought not take more than page to detail. I'm not sure we shouldn't go back to the pre-irs, pre-income tax system. Sick bastards who are widening the income gap with cronyism like the long forgotten "stimulus" hoax, now claim to be the ones to fix it? I can only hope karma is fast acting in some cases. People still try to pretend that the puppet-in-chief is a self motivated, independent thinking, caring statist. They got the statist part right
ReplyDelete