Issue Position: Income Dispartiy
Issue Position
I will advocate for the following:
In order to correct this major problem in our economy, we must make some changes in Federal Tax policy. As denoted in my Economic Policy, I would advocate treating Capitol Gains as Earned Income subject to marginal tax rates just like wages, salary and tips.
I would advocate making the First $10,000 of Federal taxable income NOT subject to the FICA Tax.
As for Social Security payroll taxes I would seek to lift the cap on Federal Taxable Income subject to Social Security/FICA Payroll taxes immediately... from the current level of $110,100 increasing the upper limit of income subject to FICA to $10,000,000.
I would seek to designate as well, Profit Distributions from Chapter S Corporations as being subject to FICA tax to remove that GAPING LoopHOLE!
I will advocate for increasing the Federal Estate Tax Exemption to $5 Million while also increasing the Federal Estate Tax Effective Rate to 55% from the current level of 35%.
I will strongly advocate for the commencement of investigation and Federal indictment of Wall Street executives, as well as politicians and appointees, responsible for the 2008 economic meltdown. The names are there - Bernanke, Paulson, Geitner, Blankfein et al.
I will advocate for a return to Glass-Steagall in re-regulating Wall Street, among other avenues such as the repeal of the Gramm-Leach-Bliley Act of 1999, to return security to the American financial system.
I will advocate as well for the prompt repeal of The Commodity Futures Modernization Act of 2000, which opened the door to the world of Credit Default Swaps and Credit Default Obligations that gave us the 2008 Wall Street collapse. To date, there has been essentially no regulation of the banking industry in the wake of the 2008 debacle, as witnessed by the recent (multi-billion dollar) losses at J.P Morgan Chase.
I will advocate for equal tax treatment of capital gains and earned income, thus restoring a modicum of equity to our federal tax policy. I will advocate for elimination of the "carried interest" tax loophole that allows private equity fund and hedge fund partners to claim their earnings as capital gains, thus paying an extremely low tax rate. This loophole will be eliminated automatically if we restore the current preferred tax treatment of capital gains to that of appropriate marginal income tax rates associated with that of earned income as suggested above.
I will advocate for legislation to repeal the tax loophole that allows foreign subsidiaries of U.S. Corporations to avoid paying federal taxes on income generated by foreign operations.
I will advocate STRONGLY AGAINST ANY legislation that allows for U.S. corporations and/or their subsidiaries to be granted a "Tax Holiday" in order to return earnings/profits to the U.S. either tax free, or subject only to an outrageously minimal tax.
Details/Rationale
Twenty years ago give or take, I sat in Delaware Park in the City of Buffalo discussing the way things were headed in America with my good friend Dave Curry. I postulated that the next great battle would be the "Haves" vs "The Have Nots." I was not so far off in my points made that day. The graphs that describe the trends in real income/purchasing power tell the tale.
In the time since I had that conversation with my friend, the middle class has shrunk dramatically while the fortunes at the very top of the income pyrimid have swelled. I won't bore you with the details...They are self-evident!
Most Americans are acutely aware that their prospects for income growth have either stagnated or shrunk over the past twenty years. Unless for example you are engaged in a particular area of the economy where your employment has remained more or less secure such as in my case, health care. Then you are feeling the crunch. Although even those who are physicians are not doing so well anymore due to a number of factors.
If you are a student at any level, you realize that opportunity has become increasingly limited in all sorts of fields that once promised prosperity and security. Though some who have no reason for concern with their employment and career prospects may cry "The Politics of Envy," more rational consideration depicts our shared dilemma as a system that is completely out of balance.
The Problem IS... Lack of Demand
Nobel prize winning economists describe a lack of demand as being behind our lagging economy. Businesses need customers and if those who would aspire to be their customers have not the wherewithal to purchase goods and services produced by a given business, then all concerned suffer the consequences.
So called "Trickle Down" or "Supply Side" tax policy has been tried for now better than three decades... IT HAS NOT WORKED! If ONLY we lower the taxes on the top, then and ONLY then will business "create" more jobs.... Simply LUDICROUS! The immature thought that someday I just might win the lottery and I don't want to have to pay taxes on my winnings just does NOT hold water and should NOT fly. But interestingly, a certain proportion of people do amazingly believe such propaganda.
A review of the charts below graphically depict where the American economy has been, is now, and where it is going...
http://www.hugdaily.org/brian-rogel/united-states-income-disparity-top-marginal-tax-rates
The chart below is a graphical representation of United States income disparity throughout history. It clearly shows the two spikes in disparity which led to the two worst economic times the United States has ever faced.
In 1928 the disparity grew to a level that unbalanced the economy and pulled money away from the working class. By 1929 the Great Depression had begun...
The depression didn't end until the early 1940's when the disparity dropped to a stabilizing level.
Large drops in top marginal tax rates led to these two extreme spikes in income disparity. Brian Rogal as denoted above.
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Over the last 100 years we've had two major troughs occur in our top marginal rates.
These troughs were the only periods in the history of the United States where the top marginal capital gains tax rate was dropped below 20%.
The first led to the Great Depression, and the second has lead to our current Great Recession.
Presently the top marginal capital gains tax rate sits at 15%. Brian Rogal as denoted.
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The situation will not be resolved and will only worsen unless...
"WE" take it upon ourselves to elect people to office who...
#1 Understand the problem...
# 2 Have the stamina and intestinal fortitude to stand up to the forces in control of the congress that are arrayed against disturbing their Status Quo.
Why would people of relatively modest or even meager means take to heart such nonsense. Is there such envy in this country for those of great wealth that we should just... PAY THEM BECAUSE THEY'RE RICH? While the vast majority of the population suffers the consequences...
Food for thought... Business does NOT hire more employees because they received a Tax cut...
Business will hire more employees when and if they have INCREASED DEMAND for their products and services. In order for everyone to thrive, including those at the top, people MUST be able to purchase the products that business creates.
A century ago, Henry Ford had it right when he said that his workers MUST be able to earn enough to afford to buy one of the automobiles that they were helping to make.
It is no different NOW! Economic principles do not change. Billionaire Nick Hanauer describes this necessary phenomenon in a very clear and concise manner in a several videos the links to which I will provide for your convenience.
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And... Just to be "Fair and Balanced," here is Nick on Fox.... It would be nice if Neal would just allow Nick to speak...
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