I rarely violate fair use and copy something in its entirety having been well schooled in that as a professor. However, Common Dreams has this great set of numbers that needs to be reprinted. We don’t profit from anything so hopefully, they’ll be forgiving. Also, I’m actively plugging the work they do so, they do have a subscribe button and a donate button. Also, please notice I’ve recognized the author of this great set of numbers too. So, forgive me but this is wonderful and here it is in its entirety. It also includes a great looking Banksy-like graphic.
Published on Monday, November 19, 2012 by Common Dreams
Ten Numbers the Rich Would Like Fudged
The numbers reveal the deadening effects of inequality in our country, and confirm that tax avoidance, rather than a lack of middle-class initiative, is the cause.
1. Only THREE PERCENT of the very rich are entrepreneurs.
According to both Marketwatch and economist Edward Wolff, over 90 percent of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), personal business accounts, the stock market, and real estate. Only 3.6 percent of taxpayers in the top .1% were classified as entrepreneurs based on 2004 tax returns. A 2009 Kauffman Foundation study found that the great majority of entrepreneurs come from middle-class backgrounds, with less than 1 percent of all entrepreneurs coming from very rich or very poor backgrounds. (photo: withayou via flickr)
2. Only FOUR OUT OF 150 countries have more wealth inequality than us.
In a world listing compiled by a reputable research team (which nevertheless prompted double-checking), the U.S. has greater wealth inequality than every measured country in the world except for Namibia, Zimbabwe, Denmark, and Switzerland.
3. An amount equal to ONE-HALF the GDP is held untaxed overseas by rich Americans.
The Tax Justice Network estimated that between $21 and $32 trillion is hidden offshore, untaxed. With Americans making up 40% of the world’s Ultra High Net Worth Individuals, that’s $8 to $12 trillion in U.S. money stashed in far-off hiding places.
Based on a historical stock market return of 6%, up to $750 billion of income is lost to the U.S. every year, resulting in a tax loss of about $260 billion.
4. Corporations stopped paying HALF OF THEIR TAXES after the recession.
After paying an average of 22.5% from 1987 to 2008, corporations have paid an annual rate of 10% since. This represents a sudden $250 billion annual loss in taxes.
U.S. corporations have shown a pattern of tax reluctance for more than 50 years, despite building their businesses with American research and infrastructure. They’ve passed the responsibility on to their workers. For every dollar of workers’ payroll tax paid in the 1950s, corporations paid three dollars. Now it’s 22 cents.
5. Just TEN Americans made a total of FIFTY BILLION DOLLARS in one year.
That’s enough to pay the salaries of over a million nurses or teachers or emergency responders.
That’s enough, according to 2008 estimates by the Food and Agriculture Organization and the UN’s World Food Program, to feed the 870 million people in the world who are lacking sufficient food.
For the free-market advocates who say “they’ve earned it”: Point #1 above makes it clear how the wealthy make their money.
6. Tax deductions for the rich could pay off 100 PERCENT of the deficit.
Another stat that required a double-check. Based on research by the Tax Policy Center, tax deferrals and deductions and other forms of tax expenditures (tax subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes), which largely benefit the rich, are worth about 7.4% of the GDP, or about $1.1 trillion.
Other sources have estimated that about two-thirds of the annual $850 billion in tax expenditures goes to the top quintile of taxpayers.
7. The average single black or Hispanic woman has about $100 IN NET WORTH.
The Insight Center for Community Economic Development reported that median wealth for black and Hispanic women is a little over $100. That’s much less than one percent of the median wealth for single white women ($41,500).
Other studies confirm the racially-charged economic inequality in our country. For every dollar of NON-HOME wealth owned by white families, people of color have only one cent.
8. Elderly and disabled food stamp recipients get $4.30 A DAY FOR FOOD.
Temporary Assistance for Needy Families (TANF) has dropped significantly over the past 15 years, serving only about a quarter of the families in poverty, and paying less than $400 per month for a family of three for housing and other necessities. Ninety percent of the available benefits go to the elderly, the disabled, or working households.
Food stamp recipients get $4.30 a day.
9. Young adults have lost TWO-THIRDS OF THEIR NET WORTH since 1984.
21- to 35-year-olds: Your median net worth has dropped 68% since 1984. It’s now less than $4,000.
That $4,000 has to pay for student loans that average $27,200. Or, if you’re still in school, for $12,700 in credit card debt.
With an unemployment rate for 16- to 24-year-olds of almost 50%, two out of every five recent college graduates are living with their parents. But your favorite company may be hiring. Apple, which makes a profit of $420,000 per employee, can pay you about $12 per hour.
10. The American public paid about FOUR TRILLION DOLLARS to bail out the banks.
That’s about the same amount of money made by America’s richest 10% in one year. But we all paid for the bailout. And because of it, we lost the opportunity for jobs, mortgage relief, and educational funding.
Bonus for the super-rich: A QUADRILLION DOLLARS in securities trading nets ZERO sales tax revenue for the U.S.
The world derivatives market is estimated to be worth over a quadrillion dollars (a thousand trillion). At least $200 trillion of that is in the United States. In 2011 the Chicago Mercantile Exchange reported a trading volume of over $1 quadrillion on 3.4 billion annual contracts.
A quadrillion dollars. A sales tax of ONE-TENTH OF A PENNY on a quadrillion dollars could pay off the deficit. But the total sales tax was ZERO.
It’s not surprising that the very rich would like to fudge the numbers, as they have the nation.
Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.
Thank you Paul Bucheit and Common Dreams for making this available. Facts should speak louder than Republican memes.
BB sent me this wonderful link last night to something that’s always fascinated me. I’ve had an enduring interest in the beautiful cave art of prehistoric peoples in Europe. New dating evidence has given us some new takes on these very first expressions of humanity in early people.
Stone Age artists were painting red disks, handprints, clublike symbols and geometric patterns on European cave walls long before previously thought, in some cases more than 40,000 years ago, scientists reported on Thursday, after completing more reliable dating tests that raised a possibility that Neanderthals were the artists.
Hand stencils at the El Castillo Cave in Spain have been dated to have been created earlier than 37,300 years ago, making them the oldest cave paintings in Europe.
A more likely situation, the researchers said, is that the art — 50 samples from 11 caves in northwestern Spain — was created by anatomically modern humans fairly soon after their arrival in Europe.
The findings seem to put an exclamation point to a run of recent discoveries: direct evidence from fossils that Homo sapiens populations were living in England 41,500 to 44,200 years ago and in Italy 43,000 to 45,000 years ago, and that they were making flutes in German caves about 42,000 years ago. Then there is the new genetic evidence of modern human-Neanderthal interbreeding, suggesting a closer relationship than had been generally thought.
The successful application of a newly refined uranium-thorium dating technique is also expected to send other scientists to other caves to see if they can reclaim prehistoric bragging rights.
In the new research, an international team led by Alistair W. G. Pike of the University of Bristol in England determined that the red disk in the cave known as El Castillo was part of the earliest known wall decorations, at a minimum of 40,800 years old. That makes it the earliest cave art found so far in Europe, perhaps 4,000 years older than the paintings at Grotte Chauvet in France.
Obama gave a speech on the economy yesterday in swing state Ohio. Here’s the transcript of the speech from WAPO if you’re interested.
This has to be our north star, an economy that’s built not from the top down but from a growing middle class; that provides ladders of opportunities for folks who aren’t yet in the middle class.
You see, we’ll never be able to compete with some countries when it comes to paying workers lower wages or letting companies do more polluting. That’s a race to the bottom that we should not want to win, because those countries don’t have a strong middle class, they don’t have our standard of living.
The race I want us to win — a race I know we can win — is a race to the top. I see an America with the best-educated, best- trained workers in the world; an America with a commitment to research and development that is second to none, especially when it comes to new sources of energy and high-tech manufacturing.
I see a country that offers businesses the fastest, most reliable transportation and communications systems of anywhere on Earth.
I see a future where we pay down our deficit in a way that is balanced — not by placing the entire burden on the middle class and the poor, but by cutting out programs we can’t afford and asking the wealthiest Americans to contribute their fair share.
That’s my vision for America: education, energy, innovation, infrastructure, and a tax code focused on American job creation and balanced deficit reduction.
This is the vision behind the jobs plan I sent Congress back in September, a bill filled with bipartisan ideas that, according to independent economists, would create up to 1 million additional jobs if passed today.
This is the vision behind the deficit plan I sent to Congress back in September, a detailed proposal that would reduce our deficit by $4 trillion through shared sacrifice and shared responsibility.
This is the vision I intend to pursue in my second term as president because I believe..
… because — because I believe if we do these things — if we do these things more companies will start here and stay here and hire here, and more Americans will be able to find jobs that support a middle class lifestyle.
You can fact check the Obama and Romney economics speeches here. Here’s two of Romney’s more obvious honkers.
“How about Obamacare? The president said the other day that he didn’t know that Obamacare was hard for small business. Oh, really? The Chamber of Commerce carried out a survey, some 1,500 businesses across America. Seventy-five percent of those people surveyed said Obamacare made it less likely for them to hire people.”
Oh my. The governor clearly had not read Thursday’s Fact Checker column showing that (a) Obama did not really say that and (b) he was answering a misinformed question. However, with the phrase “those people surveyed,” Romney did properly characterize the Chamber of Commerce survey, which because of its design cannot be used to draw conclusions about all small businesses — only the ones that were surveyed.
“The president said that if we let him borrow $787 billion for a stimulus, he’d keep unemployment below 8 percent nationally. We’ve now gone 40 straight months with unemployment above 8 percent.”
We earlier had dinged Romney with Two Pinocchios for this statement, because the president never said this; this was a staff estimate before he took the oath of office.
The most outrageous example of the Republican war on women happened yesterday in the Michigan legislature. Two Democratic Women members were banned from speaking on the floor because they dared stand up for women’s rights to abortion services. Yesterday, we heard the ban was for using the word vagina. Today, we’re being told it’s for being ‘disruptive’. You can watch their speeches at this link at TP.
A male Republican House leader in Michigan silenced two female Democratic state legislators on Thursday after the pair tried to advance a measure that would have reduced access to vasectomies.
While discussing a bill that would erode the availability of abortion, Reps. Barb Byrum and Lisa Brown introduced an amendment to apply the same regulations to vasectomies that GOP lawmakers wanted to add to abortion services. The debate grew heated, as Republicans sought to gravel down the women. Byrum was not permitted to speak in favor of the measure and Brown was repeatedly interrupted. “I’m flattered that you want to get in my vagina, but no means no,” she said. The next day both were silenced.
The Federal Reservereleased new numbers on Monday. Unsurprisingly, wealth distribution is even more skewed than income distribution. In 2010, the median family had assets (including their house but subtracting their mortgage) of $77,300. The top 10 percent had almost $1.2 million, or more than 15 times as much.
But the headlines — and rightly so — went to the dismal fact that household wealth has been sinking for all categories of Americans. As I said, the net worth of the median family in 2010 was $77,300. In 2007, the net worth of the median family was $126,400. That’s a drop of almost 40 percent in just three years. (All these numbers are corrected for inflation.)
Characteristically taking the longer view, the New York Times led with the fact that household savings were back to where they had been in the early 1990s, “erasing almost two decades of accumulated prosperity.”
Most of the lost household net worth of recent years is due to the drop in housing prices. This is comforting, in a way, because the price of land and things built on land — and what, ultimately, is not? — are different from the price of other goods and services.
Here’s a great story at The Nation that shows how fear of sharia law taking root in the US is just good old fashioned bigotry and based on nothing but fear and loathing.
The true story of Sharia in American courts is not one of a plot for imminent takeover but rather another part of the tale of globalization. Marriages, divorces, corporations and commercial transactions are global, meaning that US courts must regularly interpret and apply foreign law. Islamic law has been considered by American courts in everything from the recognition of foreign divorces and custody decrees to the validity of marriages, the enforcement of money judgments, and the awarding of damages in commercial disputes and negligence matters.
As an attorney, consultant or expert witness, I have handled more than 100 cases involving components of Sharia. In a case I tried in 2002, Odatalla v. Odatalla, a New Jersey couple had signed an Islamic marriage contract consistent with their cultural traditions. When the wife filed for divorce, she asked the court to enforce the mahr, or dowry provision, in her contract, which called for the husband’s payment of $10,000 upon the dissolution of their marriage. Superior Court Judge John Selser found the marriage contract valid under New Jersey law, concluding, “Clearly, this court can enforce a contract which is not in contravention of established law or public policy.”
In a 2003 case involving Exxon Mobil and a Saudi oil company, the parties had agreed as part of a commercial transaction that Saudi law would govern any potential disputes. After the Saudi company sued its former business partner, Exxon Mobil, the Delaware Superior Court heard testimony on Saudi law, which applies traditional Sharia, and the judge instructed the jury to base its decision accordingly. The jury returned a $400 million–plus verdict in favor of Exxon Mobil and against the Saudi firm.
Finally, in a more recent case I was involved in, a state judge declined to recognize a Syrian court order that would have transferred the custody of a child to her father because of the mother’s remarriage. The judge reasoned that remarriage alone is not sufficient to transfer custody. Far from deferring to judgments from foreign countries, US courts regularly refuse to recognize such orders due to the constitutional and due-process implications.
Had an anti-Sharia ban been in place in these courts, Exxon could not have won its verdict, nor would the wife in Odatalla have been able to enforce her marriage contract. The ban would have stripped those judges of their ability to fully and fairly consider the cases. For litigants in states where such a ban exists, these statutes are an unconstitutional infringement of the people’s freedom of contract, free exercise of religion and right to equal protection.
So, that’s a few things to get you started this morning. What’s on your reading and blogging list today?
It’s more than a bit disingenuous to start screaming class war now when the first shot was fired some years ago and the little guys are just finally waking up to the smell of $10 cappuccinos on $5 an hour wages. The data shows the income gap has been persistent and widening since the 1980s. The only thing new under the sun is that the folks that started the entire thing are the ones screaming and shifting blame.
I’ve found some pretty fuzzy math that argues that Barack Obama–of ALL people–has just declared a class war some time this month by the preeminent defenders of the looting. I thought I’d just share some of the intellectual shenanigans to inspire the pitch folk wielder in you. This is one little whiny boy who complains the rich are just overtaxed today. He even trots out some really really bad data to support the temper tantrum.
It’s official: America is at class war, and President Barack Obama proudly leads the charge against this country’s wealthy.
“If asking a millionaire to pay the same tax rate as a plumber makes me a class warrior ― a warrior for the working class ― I will accept that,” Obama shouted Tuesday at Denver’s Abraham Lincoln High School. “I will wear that charge as a badge of honor.”
“Middle-class families shouldn’t pay higher tax rates than millionaires and billionaires. A teacher or a nurse or a construction worker making $50,000 a year shouldn’t pay higher tax rates than somebody making $50 million.”
Obama’s assault on the affluent rests upon a sky-high stack of lies. Obama is too well staffed and too well informed not to know otherwise. So, maddeningly, he straight-out lies to the American people.
For days before Obama opened his mouth in Denver, multiple news accounts and opinion pieces annihilated the casus belli of his War on the Wealthy. Nonetheless, Obama keeps spouting falsehoods, perhaps hoping that his smooth voice will hypnotize Americans into believing his words.
“Fact check: The wealthy already pay more taxes,” read the headline above a September 20 Associated Press. “President Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries,” Stephen Ohlemacher wrote. “The data say they already are.”
Nationwide, Ohlemacher and others dismantled Obama’s soak-the-rich thesis. The rich are soaked today.
Okay, the author of this stupid bit of faux economics is a “media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.“ He makes THE cardinal dumb mistake for the economic illiterate. He makes no distinction between real and nominal figures which basically means adjusting for changes in purchasing power to dollar figures over time but what do you expect from two ideological journalists. The other idiot he quotes does the same thing. You can’t do these kinds of figures in nominal terms and compare anything. Here’s Paul Krugman explaining the difference between the value of a dollar today and a dollar around world war 2 which is what seems to really confuse these guys.
As background, it helps to know what has been happening to incomes over the past three decades. Detailed estimates from the Congressional Budget Office – which only go up to 2005, but the basic picture surely hasn’t changed – show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II.
Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million.
So do the wealthy look to you like the victims of class warfare?
Paying more in dollars today doesn’t amount to the same thing as paying more in purchasing power and real income today and yesterday. Additionally, the argument does not take into account the differences in taxes where the money really lies. First, corporations have weaseled so many exceptions to the tax law, many pay next to nothing in taxes. Corporations are supposed to be people now remember? Well, they dodge taxes in a big way. Second, most extremely wealthy people get the majority of their income from capital gains and not earned income. It’s so easy to throw around numbers when you narrow your argument down to a place that ignores the big picture. One of the biggest problems with this argument is that it ignores the other taxes collected by the federal government. Social Security Taxes are the most regressive taxes in the country. They apply only to 100% of the lowest levels of income. The majority of rich people’s income avoids this tax. The Social Security cap effectively puts most of the earned income of the wealthiest individuals off the table. For some reason, Social Security always counts wrong against the federal deficit for these guys but gets ignored in the federal tax equations.
Krugman has argued against the use of fuzzy math a lot on his blog. Here’s another good example on the Distribution Effect of Tax Cuts. Again, focusing on one narrow tax and ignoring the rest is fuzzy math. Also, ignoring the favoritism implied in all the latest tax cut laws is presumptuous.
Another, more subtle trick involves comparing percentage changes in taxes as opposed to tax changes as a percentage of income.
The starting point is that federal taxes are indeed progressive on average (although there are billionaires who pay a lower rate than their secretaries). And this in turn means that you have to be careful about the question when evaluating a change in taxes.
Suppose that it’s 1979, and individual A is a member of the working poor, paying 12 percent of his income in taxes — basically payroll tax and not much else. Meanwhile, individual B is very wealthy, and pays 40 percent of his income in taxes — as the very wealthy did on average 30 years ago.
Now suppose that 30 years of conservative governance lead to a fall of a quarter in both individuals’ average tax rates; A’s rate falls from 12 to 9, B’s from 40 to 30. Would it make sense to say that they have gained equally from tax cuts?
Clearly not. A’s after-tax income has risen from 88 to 91 percent of pretax income, a gain of 3.4 percent. B’s after-tax income has risen from 60 to 70 percent of pretax income, a gain of 16.7 percent. The distribution of after-tax income has become substantially less equal. And that’s the calculation I was doing here.
Now, right-wingers come back and say that this is what has to happen when you cut taxes. No, it doesn’t. And anyway, cutting taxes is itself a choice — and they’re a choice that then leads to demands that we cut programs for the poor and middle class to close the deficit those tax cuts created.
The point is that yes, tax policy these past 30 years has been very much tilted toward benefiting the rich.
Here’s another perspective on that from a letter to the editor in a small daily in Prescott Arizona. I’m taking this as an example because it’s becoming clearer that more people get this and aren’t falling for the memes.
In this newly announced war, the rich are being cast as victims. Yet the top 1 percent of American taxpaying households has been able to use the power of its wealth to influence government to cut its tax rate by 100 percent in the past generation and a half. In actuality, this groups pays only 17 percent of its income in income taxes. In the past 30 years, the income of the top one percent has increased 256 percent and their percentage of our nation’s wealth has grown from 20 percent to 40 percent.
The story is not the same for middle-class Americans. Their income has moved upward a mere 11 percent in the same time period. The wealth of the middle class resides in its owner-occupied homes. Foreclosures and declining real estate values continue to erode the holdings of the middle class. Since most middle class Americans receive wages, there is little opportunity to reduce their taxes beyond the tax rate applicable to their income.
The number of Americans falling below the poverty line has continued to grow. According to the 2010, census more than 46 million Americans live below the poverty line; or one in six.
Class warfare is indeed a fact in our nation. However, it was not initiated by President Obama. It is a fact in long standing. If Paul Revere were sounding the alarm today, he’d be about 30 years too late.
One of the most disingenuous class war memes out there came one of the truly evil people in Congress these day. That would be Eric Cantor who suggests that taxing the rich would shut down Soup Kitchens. If you have ever done any analysis on the types of donations given by the rich compared to that given by the rest of us you’d see pretty clearly that the rich tend to skew their donations to art and culture nonprofits. Again, we have silly arguments that ignore the big picture.
Cantor complained about the president’s proposal to limit the value of the deduction for charitable deductions (and other deductions and some exclusions) to 28 percent. That would raise the cost of giving a dollar to 72 cents because the proposal would cut the tax savings to 28 cents. The higher price of giving would likely induce people to give less (at least in total—we don’t know whether they’d cut their donations to soup kitchens).
But that logic extends to other proposals to change tax rates. By Cantor’s own logic, tax policies that he supports could also harm soup kitchens by reducing donations. Cutting the top tax rate to 25 percent, for example, would raise the cost of giving to 75 cents per dollar, leading high-income donors to give less. (That reduction would be partly offset by what economists call the “income effect”—lower taxes raise after-tax incomes, so people give more because they have more to give. But the “price effect” from raising the cost typically outweighs the income effect.)
Another example: Allowing the 2001-03 tax cuts to expire for high-income taxpayers, which the president has repeatedly proposed and which Cantor opposes, could help charities. Boosting the top tax rate to 39.6 percent would lower the cost of giving and increase contributions. (Again, an income effect would offset at least some of the gain—higher taxes reduce after-tax income so people give less.)
In any case, it’s not soup kitchens that should worry about lower donations from the rich. More than 60 percent of donations in 2005 for basic needs came from people with income under $200,000, according to a 2007 study by the Center on Philanthropy at Indiana University. In contrast, more than 80 percent of contributions to health organizations and more than 90 percent of those for education and the arts were from people making more than $200,000. Those groups have a lot more to fear from reduced tax savings for donations.
Maybe it’s silly to complain that cutting tax rates would hurt charities by leading people to give less. But Cantor’s complaint that the president’s plan would go after soup kitchens in perilous economic times is equally silly. Both arguments are true, but both ignore larger points.
It’s truly odd that a man that wants to eliminate the safety net programs is concerned about shutting down a few Soup Kitchens. Again, the real problem is the rules that let folks like hedge fund managers avoid taxes like crazy when millionaire doctors and business owners have to search for deductions to bring down their tax bill. It wouldn’t exactly bring a windfall amount of revenues but it would at least make the tax system more reasonable.
The Top 400 tax filers – the very richest Americans – do pay a lower rate of just 18.11 percent of their total income. Why? Many of them are hedge fund managers and people like Buffet — their income is pegged how much their investment fund grows. For some reason, this income is counted as so-called “carried interest” (even though it is not interest at all; it’s more like a performance bonus) and is taxed at the lower 15 percent capital gains rate.
It’s a loophole for hedge managers, pure and simple. But while it may be an outrage that these uber-rich hedge fund managers pay such a low rate compared to the rest of us, there are just not many of them out there.
But the top 400 tax filers represent a tiny sliver – just .00028 percent of all filers. The vast majority of those earning over $1 million a year pay at a higher rate, which is why the average tax rate for this group, according to the Tax Foundation, is 29.1 percent of taxable income. And, yes, this number includes income taxes, payroll taxes and capital gains taxes.
So, most of the rich do contribute a good share of their income to taxes. The real conversation should be given the situation our country is in, given the level of taxes in the past, given that the wealthy actually benefit more from everything the country has to offer including its public goods, and given that these lower tax rates have really not produced any thing but bad results, why frame a return to more reasonable rates as “class warfare”?
I think this can be seen in terms of a bigger issue of the new right wing “populism” being driven by monied interests. Many Fox newscasters and Tea Party types are actually very wealthy people who benefit from the demagoguery they promote. It’s not so much “populism” as it is creating tension between classes of “have-nots”. This class war far meme is just the latest in their attempt to get every one’s eye off the things that have really lowered US incomes and standards of living for 98% of the populace. Cries of unfair taxation take every one’s attention from the real issues and problems. As long as the political and power centers of the country are enclaves of rich, wealthy, sheltered elites, their media, their agendas, and their memes will be voiced in the corporate media and their interests will garner political attention.