Sunday, November 23, 2014

Aesthetically Pleasing

Video: This Is What's Happening In Mexico Right Now - Things the US media won't show.

Economists Say We Should Tax The Rich At 90 Percent







America has been doing income taxes wrong for more than 50 years.
All Americans, including the rich, would be better off if top tax rates went back to Eisenhower-era levels when the top federal income tax rate was 91 percent, according to a new working paper by Fabian Kindermann from the University of Bonn and Dirk Krueger from the University of Pennsylvania.
The top tax rate that makes all citizens, including the highest 1 percent of earners, the best off is “somewhere between 85 and 90 percent,” Krueger told The Huffington Post. Currently, the top rate of 39.6 percent is paid on income above $406,750 for individuals and $457,600 for couples.
Fewer than 1 percent of Americans, or about 1.3 million people, reach that top bracket.
Here is the conclusion from the report, charted:
marginal tax rates
What you’re seeing is decades of a more or less strict adherence to the gospel that tax cuts for the highest income earners are good. The trend began with President Kennedy, but his cuts were hardly radical. He lowered rates when the American economy was humming along, no longer paying for World War II and, relative to today, an egalitarian dreamland. To put things in perspective, Kennedy cut rates to around 70 percent, a level we can hardly imagine raising them to today. The huge drops -- from 70 percent to 50 percent to less than 30 percent -- came with the Reagan presidency.
In comparison to decades of cuts, Presidents George H.W. Bush, Bill Clinton, and Barack Obama each raised taxes at the top by a historically insignificant amount. Obama also proposed modest tax increases, raising taxes on families making more than $250,000 from 33 to 36 percent, and on individuals making more than $200,000 from 36 to 39.6 percent. These increases failed in the House.
A 90 percent top marginal tax rate doesn’t mean that if you make $450,000, you are going to pay $405,000 in federal income taxes. Americans have a well-documented trouble understanding the notion of marginal tax rates. The marginal tax rate is the amount you pay on your income above a certain amount. Right now, you pay the top marginal tax rate on every dollar you earn over $406,750. So if you make $450,000, you only pay the top rate on your final $43,250 in income.
A very high marginal tax rate isn’t effective if it’s riddled with loopholes, of course. Kindermann and Krueger's paper is also focused solely on income, not wealth, and returns on wealth are how the truly superrich make a living.
Despite these limitations, Kindermann and Krueger say that a top marginal tax rate in the range of 90 percent would decrease both income and wealth inequality, bring in more money for the government and increase everyone’s well-being -- even those subject to the new, much higher income tax rate.
“High marginal tax rates provide social insurance against not making it into the 1 percent,” Krueger told The Huffington Post. Here’s what he means: There’s a small chance of moving up to the top rung of the income ladder, Krueger said. If rates are high for the top earners and low for everyone else, there’s a big chance you will pay a low rate and a small chance you will pay a high rate. Given these odds, it is rational to accept high income tax rates on top earners and low rates for the rest as a form of insurance.
This insurance takes the form of low-income people paying dramatically less in taxes. “Everyone who is below four times median income” -- that’s about $210,000 for households -- “pays less,” Kruger said.

The paper assumes that tax rates won’t stop a future Bill Gates from wanting to start Microsoft. Instead, what it finds is that labor supply among the 1 percent would decline -- translation, they would work a little less -- but it “does not collapse.” That’s because of who the authors assume makes up the top income bracket: celebrities, sports stars, and entrepreneurs -- people with innate talents that are hugely rewarding, but only for a short period of time. They only have a few years to use their skills to make most of the money they will ever make. High tax rates don’t lessen their degree of desire to be productive, the authors said.
Krueger described the phenomenon like this: “How much less hard would LeBron James play basketball if he were taxed at a much higher rate? The answer is not much. “James knows he only has five years,” or so of peak earning potential, Krueger said, and so he will work to make as much as he can during that time. If high income tax rates robbed the would-be 1 percent of their stick-to-itiveness, the paper’s conclusions would change.
lebron james
(LeBron James responds to a 90 percent top marginal tax rate)

And so whether you agree with this paper’s conclusion comes down, to a certain extent, to what you think of the 1 percent of income earners: who they are and why they make so much money. Over the last few decades, a huge portion of the rapid growth of the very highest incomes relative to the rest of us has been driven by rising executive and financial sector pay. The question, then, is if confronted with a vastly higher tax rate, would Jamie Dimon still behave like LeBron James.

Friday, November 21, 2014

Meet the Fortune 500 Companies Funding the Political Resegregation of America

North Carolina's heavily gerrymandered 12th congressional district.


Over the past four to five years, the United States has been resegregated—politically. In states where registered Democrats outnumber Republicans and presidential races can be nail-biters, skillful Republican operatives have mounted racially-minded gerrymandering efforts—the redrawing of congressional and state legislative districts—that have led to congressional delegations stacked with GOP members and yielded Republican majorities in the state legislatures.
In North Carolina, Pennsylvania, and Ohio, to name just three, GOPers have recast state and congressional districts to consolidate black voters into what the political pros call "majority-minority districts" to diminish the influence of these voters. North Carolina is an especially glaring example: GOP-redistricting after the 2010 elections led to half the state's black population—1.1 million people—being corralled into one-fifth of the state legislative and congressional districts. "The districts here take us back to a day of segregation that most of us thought we'd moved away from," State Sen. Dan Blue Jr., who was previously North Carolina's first black House speaker, told the Nation in 2012.
A major driving force behind this political resegregation is the Republican State Leadership Committee, a deep-pocketed yet under-the-radar group that calls itself the "lead Republican redistricting organization." The RSLC is funded largely by Fortune 500 corporations, including Reynolds AmericanLas Vegas Sands,WalmartDevon EnergyCitigroupAT&TPfizerAltria GroupHoneywell InternationalHewlett-Packard. Other heavyweight donors not on the Fortune 500 list include Koch Industries, Blue Cross Blue Shield, and the US Chamber of Commerce. At the same time these big-name firms underwrite the RSLC's efforts to dilute the power of black voters, many of them preach the values of diversity and inclusion on their websites and in corporate reports.
As part of its Redistricting Majority Project—which, tellingly, is nicknamed REDMAP—the RSLC, starting in 2010, poured tens of millions of dollars into legislative races around the country to elect new GOP majorities. Next it provided money and expertise to state officials redrawing political boundary lines to favor the Republican Party—and to shrink the clout of blacks, Hispanics, and other traditionally Democratic voters. Unlike its Democratic equivalent, the RSLC has vast sums at its disposal, spending $30 million during the 2010 elections, $40 million in 2012, and $22 million in 2014.
Here is a partial list of RSLC donors—how much they donated to the group in the past four years and what they each have had to say about their own efforts to foster diversity. (All the companies on this list did not respond to requests for comment except for Altria Group, Citigroup, and Reynolds American, which declined to comment.)
Altria Group
$2,682,350
"[W]e foster diversity and inclusion among our workforce, consistent with our leadership responsibilities and core values." (Source)
AT&T
$922,993
"AT&T’s 134-year history of innovation is a story about people from all walks of life and all kinds of backgrounds coming together to improve the human condition. It is our diversity, coupled with an inclusive culture that welcomes all points of view, which makes us who we are: a great place to work, a desired business partner and a committed member of the communities we serve." (Source)
Blue Cross/Blue Shield
$4,655,322
"Let's get there together—with one perspective we can go far, with many perspectives we can move beyond all limits. Join an organization that values diversity." (Source)
Citigroup
$764,328
"We see diversity as a source of strength." (Source)
Comcast
$598,053
"We recognize, celebrate, and support diversity and inclusion, which is at the very heart of our culture." (Source)
Devon Energy
$1,450,000
"Devon believes diversity, the collective mixture of similarities and differences of our employees, is a valued asset." (Source)
Reynolds American
$3,419,781
"Reynolds American and its operating companies have long recognized, valued and enjoyed the many benefits that diversity brings to both our employees and our businesses. Our commitment to diversity is a strong demonstration of the core values that our companies share." (Source)
US Chamber of Commerce
$9,077,760
"Diversity and inclusion programs can provide valuable resources to recruit and retain a strong employee base that will generate novel ideas." (Source)
Walmart
$979,429
"Diversity has been at the core of our culture since Sam Walton opened our doors in 1962…We can only help our associates, customers and partners live better if we really know them. And that means understanding and respecting differences and being inclusive of all people." (Source)

Thursday, November 20, 2014

Princeton makes it official — USA Has Become Oligarchy, No Democracy


Author: William Engdahl


Princeton makes it official — USA Has Become 

Oligarchy, No Democracy




American media is fond of speaking about “Russian Oligarchs” as if Russia were the only nation that allowed accumulation of such unprecedented wealth. The Yeltsin days of dis-order and collapse indeed saw the rapid rise of many fortunes and oligarchs—persons of very much wealth. Some of them have proven patriotic citizens, some like Khodokorvsky or the late unlamented Boris Berezhovsky proved to be loveless gangsters. A new study, however by a Princeton University Professor of the influence of very wealthy or economically powerful persons on American political policies makes clear for the first time that a genuine American Oligarchy has staged a slow coup d’etat over US foreign and domestic policy over the past three decades since the era of Ronald Reagan. This American oligarchy today is the major force for war and dis-order across the planet.

I completed by undergraduate university studies in one of America’s most elite universities, Princeton. It was during the early 1960’s and classmates came from elite preparatory private schools like Andover or Exeter. Classmates with names like Firestone or Prince Faisal were attending. Then tuition cost $650 a year, the price I paid for my used 1956 Chevy. I was only able to pay that because I was awarded a full university scholarship, raised by a working mother with modest income. Today tuition for one year at Princeton costs $41,820. Princeton speaks of money and elite families. So I noted with great interest a new study published by two Princeton professors on wealth in America since 1981.

Martin Gilens is Professor of Politics at Princeton University together with Benjamin I. Page Professor at Northwestern University have published results of a unique analysis “using a unique data set that includes measures of the key variables for 1,779 policy issues.” The study concludes that, “Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-EliteDomination…”

Their study further concluded, “When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.”

Finally they conclude, “…Our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts. Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”

In a subsequent media interview, Gilens noted what they concluded in their analysis of volumes of data from 1981-2002 for government policy decisions and the role of elites versus ordinary citizens in some 1,800 different policy initiatives: “One central factor is the role of money in our political system, and the overwhelming role that affluent individuals that affluent individuals and organized interests play, in campaign finance and in lobbying. And the second thing is the lack of mass organizations that represent and facilitate the voice of ordinary citizens. Part of that would be the decline of unions in the country which has been quite dramatic over the last 30 or 40 years. And part of it is the lack of a socialist or a worker’s party.”

The study verifies with ample empirical data what I have witnessed during the course of my own life as an American over the past four decades. There has been a silent coup d’etat of the monied class, an American oligarchy. Names such as Bill Gates, Warren Buffett, David Rockefeller, Sheldon Adelson (main financier of Mitt Romney for President), the Koch Brothers (main financiers of the Tea Party political movement), George H.W. Bush and family. The top 1% have reshaped the fundamentals of American life, culture and above all politics. A decision to wage war today against Iraq, Afghanistan or Syria depends not on the will of average Americans. Obama was elected on a pledge to close the US Army torture center at Guantanamo and six years on has yet to do. He won a Nobel Peace Prize in his first month and proceeded to wage more war in Afghanistan, Egypt, Libya and most recently Syria and Ukraine.

It is important to have this in mind when judging “America.” The United States of America today bears little resemblance to that I knew when I grew up in the early 1960’s, when a used good Chevy cost $650 and college tuition could be afforded by ordinary Americans if they were willing to study. The oligarchy that has taken policy control behind a thin fa├žade of “democracy” has ultimately ruined the industrial and social fabric of the United States. They are the ones behind the Trans-Atlantic Trade and Investment Partnership, or bank deregulation so they can loot the planet. This new study by Princeton’s Prof. Gilens is a refreshing attempt, even if academic and from one of the most elite academic universities, to shed some light on what is fundamentally wrong with America over the past three decades.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”