* moving toward a more equitable distribution of income

Robert Reich (former U.S. Secretary of Labor) writes in The American Prospect (2/26/09) …

• President Obama’s new budget represents the biggest redistribution of income from the wealthy to the middle class and poor this nation has seen in more than forty years.
  • By allowing the Bush tax cuts to expire, the marginal income tax on the highest earners goes back to 39.6 % (from 35 % now), and capital gains rates to 20 % (from 15 % now).
• It’s about time a presidential budget unequivocally redistributed income from the very rich to the middle class and poor.
  • The incomes of the top one percent have soared for 30 years while median wages have slowed or declined in real terms.
    • in the 1970s, the top-earning 1% of Americans took home 8% of total income 
      
    • as recently as 1980, they took home 9%.
      
    • By 2007, the top 1% took home over 22% of total income.
  • Meanwhile, even as their incomes dramatically increased, the total federal tax rates paid by the top one percent dropped. According to the Congressional Budget Office, the top one percent paid a total federal tax rate of 37 percent three decades ago; now it’s paying 31 percent.

LMW COMMENT …

The excessive concentration of wealth among the most wealthy is the result of conscious Republican policies since the days of Ronald Reagan (even during the Clinton years, the Republicans controlled Congress for 6 of the 8 years).

These policies were fostered by the rich and those politicians they influenced, with the consent of many less well-off Americans who did not benefit, but who were attracted by the devious conservative social agenda of abortion, guns and gays. In other words, those who voted Republican against their own interests were fooled.

With the resounding election of Barack Obama, it’s clearly time for change. 

The greedy grab of the wealthy for ‘more, more, more’ is not only unfair and reprehensible in a democracy, it is also self-destructive. If the people who buy things have declining discretionary income, who will buy the products and services that create wealth in the first place?

There is nothing wrong with success bringing wealth; in fact there is much that is right in terms of incentives to creativity and the unleashing of productive energy. (This does not include, in my view, the obscene wealth related to our national casino otherwise known as Wall Street speculation, which has brought such chaos in its wake.)

Perhaps, however, we should begin to discuss how much individual wealth is appropriate.

• Are there any limits? 
  • Should a CEO earn 10 times what the average worker does? 20? 50? 600? 
• What would happen to our corporations if executive incomes  (including bonuses) were limited? 
  • Perhaps more funds would stay in the corporation to invest in new product development and to serve as a buffer against inevitable downturns.
• Should we reign in the useless and dangerous speculation in financial instruments which nobody even understands? 
  • I think everyone (except totally tone deaf Republicans) now agrees that the de-regulation policies (so trumpeted by John McCain before he got the memo) have produced catatstophic results.

These are complicated questions, the consequences of which must be carefully considered. But in a democracy, these are exactly the questions which should be asked and robustly debated.

 

Read the entire column at … http://www.prospect.org/csnc/blogs/tapped_archive?month=02&year=2009&base_name=finally_a_progressive_budget