Mt. Fuji...
1% vs. 99% for the American Dream
The basic equation of the national finance is as follows:
T: Tax Revenue
Pt: Tax Paid by the Poor
Rt: Tax Paid by the Rich
T = Pt + Rt
A: Total Budget Spending
Pa: Budget Appropriation to the Poor
Ra: Budget Appropriation to the Rich
A = Pa + Ra
If T = A, there is no financial crisis in a nation.
Pt + Rt = Pa + Ra
But, in most of countries, imbalance is the norm or deficit balance is a common matter.
Pt + Rt < Pa + Ra
To address this situation, only a several solutions are available.
1) Increase Pt, that is, increase tax on the poor.
2) Increase RT, that is, increase tax on the rich.
3) Decrease budget appropriated to the poor.
4) Decrease budget appropriated to the rich.
5) Find another source for government income.
However it is the the government or a president or otherwise a prime minister that decides what method to take. And, in a democratic nation, a ruling political party is behind the government. So, the matters is which controls the ruling party, the rich or the poor. It is of course decided through democratic process, namely by suffrage.
If the poor could control the ruling party, the government would surely opt for the above methods 2) or 4).
But, if the rich could control the ruling party, the government would surely opt for the above methods 1) or 3).
Yet, from the beginning which has money enough to pay for tax: the rich or the poor? Here you may find that "99% vs. 1%" shouted in the Occupy Wall Street movement is meaningful.
#1) The Top 1% Owns 40% of the Nation's Wealth:Nobel Laureate Joseph Stiglitz points out the richest 1% of Americans now own 40% of the nation's wealth. This disparity is much worse than it was in the past, as just 25 years ago the top 1% owned 33% of national wealth.
How much does the bottom 80% own? Only 7%.
#2) The Top 1% Take Home 24% of National Income:While the richest 1% of Americans take home almost a quarter of national income today, in 1976they took home just 9% -- meaning their share of the national income pool has nearly tripled in roughly three decades.
#3) The Top 1% Own Half of the Country's Stocks, Bonds and Mutual Funds: The Institute for Policy Studies illustrates this massive disparity in financial investment ownership, noting that the bottom 50% of Americans own only 0.5% of these investments.
#4) The Top 1% of Americans Have Only 5% of the Nation's Personal Debt:Using 2007 figures, sociologist William Domhoff points out that the top 1% have 5% of the nation's personal debt while the bottom 90% have 73% of total debt.
#5) The Top 1% Are Taking In More off the Nation's Income Than at Any Other Time Since the 1920s: Not only are the wealthiest 1% of Americans taking home a tremendous portion of the national income, but their share of this income is greater than at any other time since the Great Depression, as the Center for Budget and Policy Priorities illustrates in this chart, using 2007 data. http://finance.yahoo.com/blogs/daily-ticker/top-5-facts-america-richest-1-183022655.htmlMore specifically, including debts:
The nonpartisan agency said in a report that after-tax income on average grew by 62% during the 30-year period. But that growth wasn’t even. The wealthiest 1% of Americans saw their incomes skyrocket by 275% during that stretch, while after-tax income for the one-fifth of households with the lowest income grew by just 18% from 1979 to 2007.
For the richest Americans excluding the top 1%, household income grew by 65% during that period, while for the 60% in the middle of the income scale, the growth in after-tax income was just under 40%, the CBO said.
The bulk of this widening gap was because income before taxes and government transfers grew for wealthier earners. The top 1% of the population accounted for 60% of all such income in 2007, up from 50% in 1979.
http://blogs.wsj.com/economics/2011/10/25/income-growth-of-top-1-over-30-years-outpaced-rest-of-u-s/
So, it is apparent that the poor should control the ruling party, and the government should surely take the above stated measures 2) or 4). Then the financial problem of the US and any other country would be solved. But, reality is so different, though an African American is now the US President.
It means that power is in the hand of the rich (1% and their followers) but not the poor (99% or a lower portion of 99%). So, it is not economics, fiscal science, or financial engineering. It is politics.
Yet, rich Americans would claim that they have paid tax enough already.
But this is a false dichotomy, of course. The top 1% of income earners in the United States pull down at least $344,000 in adjusted gross income every year, earn just under 17% of the total income of the country, and pay almost 37% of all taxes. The top 5% of income earners make at least $155,000 and pay 59% of all taxes. The top 10% of income earners make at least $112,000 and pay over 70% of all taxes.
So, where would you draw the line between Americans, separating the good ones from the bad? It makes no sense to draw it at 1%, since those who make $344,000 are closer to those who make $343,000 than those who make $1 million every year.
If income doesn’t work, should taxation be the standard? Many conservatives have suggested that the line between Americans should be drawn at 53% and 47% — 53% of Americans pay taxes and the rest don’t—although they tend to vote for higher taxes on those who do pay.Nonetheless, big American corporations, sources of wealth and income of the rich, do not fulfill their public duties to pay a full amount of tax imposed on them institutionally or by law:
http://frontpagemag.com/2011/11/18/the-fuzzy-math-of-1-99/
- The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent.
- 78 of the companies enjoyed at least one year in which their federal income tax was zero or less.
- 30 companies enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.
- Total tax subsidies given to all 280 profitable corporations amounted to $222.7billion from 2008-2010.
- Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies,getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years.
- Pepco Holdings had the lowest effective tax rate of all the companies in the study, at negative 57.6 percent over the three year period.
- Some companies within sectors fare worse than others. For example, the report finds that FedEx paid a 0.9 percent tax rate over the three year period while its competitor, UPS, paid a 24.1 percent rate.
- While retailers and wholesalers in the study generally pay average effective tax rates of about 30 percent, Amazon.com paid a rate of only 7.9 percent on its $1.8 billion in profits from 2008-2010.
- Financial services received the largest share (16.8 percent) of all federal tax subsidies over the last three years. More than half of federal corporate tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.
- The top ten defense contractors saw their combined tax rate decline from 19.3 percent in 2008 to a mere 10.6 percent rate in 2010.
- U.S. corporations with significant (ten percent or more of their total worldwide profits) foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.
http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersPR.pdf
What's more 1,470 rich men evaded taxation, though 46% of American households do not pay tax.
Not the best day to report this, but the IRS says 1,470 millionaires paid no federal income taxes in 2009.
Where did the money go? Tax "expenditures" (otherwise known as deductions, write-offs, subsidies or loopholes), charities, municipal bonds and tax payments to foreign governments, according to a recent IRS report (pdf) that ABC News noticed over the weekend and that the Los Angeles Times picked up today.
More than 235,000 taxpayers earned $1 million or more in '09, with 8,274 making more than $10 million, the Internal Revenue Service said. All told, there were 140 million taxpayers.
The nonpartisan Tax Policy Center reported last month that 46% of American households (known as "units") actually will not pay federal income taxes for this year nor will receive refunds. That's because of low incomes, credits for children or other dependents, or exemptions.
http://content.usatoday.com/communities/ondeadline/post/2011/08/irs-1470-millionaires-paid-no-income-tax-in-09/1
Though 1,470 is just 0.6% of 235,000, it looks like a very tiny portion of a big iceberg.
Incidentally, even the poorest are forced to pay state sales tax in the US:
In addition, some defects in functions of the US Administration make the matter worse:
T: Tax Revenue
Pt: Tax Paid by the Poor
Rt: Tax Paid by the Rich
T = Pt + Rt
A: Total Budget Spending
Pa: Budget Appropriation to the Poor
Ra: Budget Appropriation to the Rich
A = Pa + Ra
If T = A, there is no financial crisis in a nation.
Pt + Rt = Pa + Ra
How can't this simple equation be achieved?
It is because 1% rich men has full justification to be as rich as possible in the name of the American Dream. And they know that their American Dream can be only realized by neglecting or blocking the American Dream of 99% ordinary or poor Americans.
(to be continued...)
*** *** *** ***
Though 30,000 Japanese commit suicide every year due to various problems, including unemployment and distress, the tragedy of the 3/11 Tsunami has still a grave impact on the society, since the number of deaths, including disappearance, due to the Tsunami is 20,000.
Tragically, there are some people who survived the tsunami but committed suicide in months after the incident. The main cause is economic poverty, because they lost their own houses, workplaces, or employment. The social and administrative systems of Japan cannot fully cover those affected by the disaster.
Yet, some people are resilient. And there are some compassionate public workers. It is these personal and individual efforts that sustain and help living of evacuees and survived victims the number of which is estimated to be 500,000.
As for the suicide in the general public of Japan, the deepest root of its cause is in deflation. Deflation of Japan that has continued for 15 years was directly triggered by Japanese companies that started to use cheap Chinese labor force in a large scale. The motivation of those businesses is that they intend to lower prices of their goods and reduce costs to win the ever heating-up competition in the international market. And this global competition has been spurred by globalization of economy backed by the IT technology based on the Internet and PCs.
Most of big enterprises of Japan has been successful and profitable in these 15 years featuring deflation. Conversely, big Japanese companies fully utilizing advanced technology and promoting globalization strategies are driving many Japanese workers and small-and medium sized businesses into the corner.
So, in order to save those poor Japanese, we have to stop the present globalization of economy and establish a new scheme of global trade. In this context, Trans-Pacific Partnership (TPP) should be stopped. Japan should not join it. TPP will even make tsunami victims all the more suffer.
Finally, one big problem in Japan is that while 60 million people are working, its 1% or 0.6 million are facing any sort of crises that might lead to a suicide in the worst case, 99% or 59.4 million are living a reasonable life based on advanced technology and matured economy.
So, what is needed in Japan might be "Occupy" movement by this 1%.
(Note: This is the 2011th posting of the EEE-Repoter blog. Tomorrow, it will be the 2012th. But, who have ever read all these 2011 postings except myself and the Lord God Almighty?)
Mar 11:23 For verily I say unto you, That whosoever shall say unto this mountain, Be thou removed, and be thou cast into the sea; and shall not doubt in his heart, but shall believe that those things which he saith shall come to pass; he shall have whatsoever he saith.
Incidentally, even the poorest are forced to pay state sales tax in the US:
State Sales Tax
All states except Alaska, Delaware, Montana, New Hampshire and Oregon, collect sales taxes. Delaware collects a Gross Receipts Tax (GRT) which is a business and gross receipts tax that can total 2.07%. Some have a single rate throughout the state though most permit local city and county additions to the base tax rate. Those states with a single rate include Connecticut, District of Columbia, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Rhode Island, and West Virginia.
States with the highest sales tax are: California (8.25%), Indiana (7%), Mississippi (7%), New Jersey (7%), Rhode Island (7%), Tennessee (7%), Minnesota (6.875%), Nevada (6.85%), Arizona (6.6%), Washington (6.5%), Kansas (6.3%), Texas and Illinois (6.25%).
Most states exempt prescription drugs from sales taxes. Some also exempt food and clothing purchases and a few also exempt non-prescription drugs.
http://www.retirementliving.com/RLtaxes.html
In addition, some defects in functions of the US Administration make the matter worse:
Rep. Elton Gallegly is passing along word that 2.3 million illegal aliens who paid no income taxes in 2010 nevertheless received $4.2 billion dollars in tax refunds. The numbers come from the Obama Treasury Department.
The number of illegal aliens receiving tax refunds in 2010 is 4x higher than it was in 2005. It is increasing exponentially as more illegal aliens find out about the program. The IRS allows illegals to apply for a nine digit "Taxpayer Identification Number" and the government sends them a check for tax credits even if these "taxpayers" paid nothing in income taxes. We reported earlier on how they are able to do this, and on a bill introduced to remedy the problem.Again,
http://www.westernyouth.org/the-dagger/illegal-aliens-paid-$4.2-billion-in-tax-refunds/
T: Tax Revenue
Pt: Tax Paid by the Poor
Rt: Tax Paid by the Rich
T = Pt + Rt
A: Total Budget Spending
Pa: Budget Appropriation to the Poor
Ra: Budget Appropriation to the Rich
A = Pa + Ra
If T = A, there is no financial crisis in a nation.
Pt + Rt = Pa + Ra
How can't this simple equation be achieved?
It is because 1% rich men has full justification to be as rich as possible in the name of the American Dream. And they know that their American Dream can be only realized by neglecting or blocking the American Dream of 99% ordinary or poor Americans.
(to be continued...)
*** *** *** ***
Though 30,000 Japanese commit suicide every year due to various problems, including unemployment and distress, the tragedy of the 3/11 Tsunami has still a grave impact on the society, since the number of deaths, including disappearance, due to the Tsunami is 20,000.
Tragically, there are some people who survived the tsunami but committed suicide in months after the incident. The main cause is economic poverty, because they lost their own houses, workplaces, or employment. The social and administrative systems of Japan cannot fully cover those affected by the disaster.
Yet, some people are resilient. And there are some compassionate public workers. It is these personal and individual efforts that sustain and help living of evacuees and survived victims the number of which is estimated to be 500,000.
As for the suicide in the general public of Japan, the deepest root of its cause is in deflation. Deflation of Japan that has continued for 15 years was directly triggered by Japanese companies that started to use cheap Chinese labor force in a large scale. The motivation of those businesses is that they intend to lower prices of their goods and reduce costs to win the ever heating-up competition in the international market. And this global competition has been spurred by globalization of economy backed by the IT technology based on the Internet and PCs.
Most of big enterprises of Japan has been successful and profitable in these 15 years featuring deflation. Conversely, big Japanese companies fully utilizing advanced technology and promoting globalization strategies are driving many Japanese workers and small-and medium sized businesses into the corner.
So, in order to save those poor Japanese, we have to stop the present globalization of economy and establish a new scheme of global trade. In this context, Trans-Pacific Partnership (TPP) should be stopped. Japan should not join it. TPP will even make tsunami victims all the more suffer.
Finally, one big problem in Japan is that while 60 million people are working, its 1% or 0.6 million are facing any sort of crises that might lead to a suicide in the worst case, 99% or 59.4 million are living a reasonable life based on advanced technology and matured economy.
So, what is needed in Japan might be "Occupy" movement by this 1%.
(Note: This is the 2011th posting of the EEE-Repoter blog. Tomorrow, it will be the 2012th. But, who have ever read all these 2011 postings except myself and the Lord God Almighty?)
Mar 11:23 For verily I say unto you, That whosoever shall say unto this mountain, Be thou removed, and be thou cast into the sea; and shall not doubt in his heart, but shall believe that those things which he saith shall come to pass; he shall have whatsoever he saith.