Few richs and more poors

The Kassandra Project

 

Do you remember what we said in “The invisible racism” about richs and poors? On December 15, the New York Times reported:

The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office shows.

The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.

The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the three million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.

These statistics come from “Historical Effective Federal Tax Rates: 1979 to 2005” which update the series of historical effective tax rates estimated by the
Congressional Budget Office (CBO) by providing values for an additional calendar year.

In 2005 compared with its rate in 2004, the overall effective tax rate rose by
0.4 percentage points in 2005: to 20.5 percent from 20.1 percent.

Part of that increase comes from real bracket reep, the tendency of effective income tax rates to rise as income grows faster than inflation, causing more income to be taxed in higher brackets. An upward shift in the income distribution also contributed to the increase. The rise in effective tax rates was lower than otherwise would have been expected, however, because income from capital gains, which faces lower tax rates than most other income, grew more rapidly than other forms of income, driving down the effective rate.

The effective corporate income tax rate also rose, by 0.5 percentage points, reflecting rapid growth in corporate profits and the taxes owed on those profits.

What does it mean? Corporations and rich people, become richer than yesterday, and normal and poor people become poorer than yesterday.

In this way we’ll go towards a society broken in two parts: the first will be very little but powerful, the second will be very large but without money, home, food, on the border of survival.

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  1. So what is the answer? Forbid the rich to get richer? Reward the poor for their poverty?

    I think that discussions like this always try to imply that there is something ill-gotten about the gains of the wealthy, and that the “normal” and the “poor” are robbery victims, but this suggestion is not founded in reality. In truth, those that become wealthy often do so by creative industry and thrift, and whose efforts benefit all including the poor and the normal. How many poor or normal people can access a television? Cell phone? Internet? Microwave popcorn? The poor and the normal do not have the where-with-all to make these marvels, but can certainly access them at an imaginable price because someone else with means and talent invented, manuafactured, distributed, sold, etc…

    So, do you think that the poor and the normal will invent the next iPhone if only they are given a stipend to supplement their current earnings? To make them less poor or super-normal?

    So, do you think someone who is capable of inventing the next cancer drug will be willing to do so if they know that the investment it takes to do so will never be repaid because the moment an invention become profitable it’s earnings will be seized and redistributed for the public good?

    Here’s the hard truth. The rich will always get richer faster because they got to be rich in the first place through imagination, invention, and industry – If you seized all of the wealth of the rich and spent it on social engineering, the folks that would end up rich as a result would probably be the same folks that were rich before. The same thing that got them there the first time will get them there again, period.

    Here’s another truth. The poor will only stop being poor when they exhibit the behaviors that make the rich richer. It’s not about the money they have now, it’s about what they themselves do today that will help them have a better tomorrow.

    Think of it this way. The earned income tax credit implements a policy of giving money to the working poor, and has for 50 years give-or-take. Noone who benefits from the EITC will become rich as a consequence of receiving this distribution – you only receive it if you’re poor, and when you even start to ooch out of the poor bracket, you get less of a subsidy. If you think the EITC is your ticket to a better life, why in the world would you try to earn a better income? Who on EITC doesn’t look at the annual tax bill and say darn, I didn’t get as much this year because my income went up. The decrease in EITC makes your income increases look smaller, creating a disincentive to do better. You have to be “thinking rich” in order to realize you don’t escape being poor until your earnings are much more than would qualify for EITC subsidies.

    I think the poor are helped much more by the existance of discount stores like walmart than they are by the existence of the social-security system – which takes 7% of every penny they ever make until they die and only gives them a number that they have to worry about losing, and a promise of future poverty. Walmart (Run by rich people) makes each buck worth more; government robbers make each buck worth less.

    Robbing the rich to give to the poor doesn’t make the poor rich, and usually doesn’t make the rich poor. I think it just gves the robbers something fundamentally immoral and perpetual to do.

  2. Your comment is quite good. You’re right when you say that richs improve poor quality of life, but in our article we didn’t refer to rich and creative people, but to corporations which only want to increase their money without care of any human being, poor, normal, or rich but HONEST.

    I will publish your point of view as an article because i like it very much. Thanks Brian

  3. I certainly misunderstood the thrust of your article then, which refers to households and “the top 1% of Americans” and the “bottom 20%”. Your conclusion about “Corporations and rich people” certainly made me think you were talking about individual wealth. My apologies.

    About the “corporations”, though; don’t you think most corporations are probably run for profit but with the goals of producing things, serving customers, hiring and maintaining a successful workforce, being in business again tomorrow? I’ll grant you there are bad people, and probably bad corporations, but neither could really be in the majority and still have a functioning society, could they?

    Aren’t they all just people after all?

  4. I know there are people who work for people like me. I thank them for their improvement of my quality of life.
    But on the contrary, there are a lot of people who work for their own profit, without feelings for human beings, people who are destroying my and your world with THEIR pollution.

    I think there a lot of good things in this world, and a lot of good people. But unluckly, who has the power, the real power to change something in this world, they are corporations.

    They can start with good intentions, but when they feel the smell of money, they change. It’s in the nature of the human being to do in this way.
    I like Coke, I like Mac, I like my shoes, but I’d want that they has been made by corporations who didn’t kill children with exploitation, who don’t corrupt the governments in order to obtain the power to do what they want.

    I’d like to say “I have Nike shoes: ok, I’m sure that Nike don’t kill anyone, don’t corrupt anyone, to make this shoes. I love Nike”.
    The same things for Coke or my Microsoft Windows or for the Shell fuel in my car or for nickel in my coins which has been extracted from people who live in Norilsk, Russia, in a quality of life under zero %, where “Pollution is so critical that the average life of the population does not exceed 50 years and mental illness are constantly increasing.”.

    I don’t want to destroy corporations: I just want they work legally. ALL.

    Thank you for your time Brian.

  1. 1 Corporations: a real debate « The Kassandra Project

    […] If you want to read some more comments about this topic, we suggest you to visit the page “Few richs and more poors“. […]




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