Share The Wealth .... Creating A Real Ownership Society

[Itsthetruth]

CounterPunch
February 16, 2005

Share the Wealth...Protect Retirement
Creating a Real Ownership Society
By KEVIN ZEESE

President Bush has called for creating an "ownership society." In a true ownership society --where all Americans share a piece of the economic pie --there will be secure retirements, a more vibrant economy and more entrepreneurs creating things we cannot even imagine.

President Bush is using the phrase "ownership society" as a way to sell Social Security privatization. He is misleading. He's not creating a real ownership society and a Social Security fix is really not urgently needed. The Social Security fund is secure until nearly the middle of the Century. With one change to Social Security, it would be protected throughout the Century and beyond. Currently, 6.2 cents out of every dollar of salary is taxes for Social Security up to $90,000 --a limit put in place in 2003. This is a flat tax that is particularly burdensome on low and middle income workers. By lifting this ceiling and taxing all income, Social Security will be secure and the U.S. will take a small step toward correcting the tax imbalance created over the last two decades where the wealthiest have gotten huge tax breaks while the rest of us have paid more of the cost of government. (Why shouldn't income from wealth be taxed at least as heavily as income from labor?)

However, securing Social Security is not enough to fix retirement. Pension plans and savings are the two other legs of the traditional retirement stool and both have been undermined in recent years. Savings by Americans is at a low while families struggle each month to pay their bills under an increasing debt load. Indeed, in the first quarter of 1999 the national savings rate turned negative for the first time since the Great Depression. At the same time, companies have broken long-standing pension promises to their employees and retirees undercutting the 'economic fabric' of retirement security of millions of people. Congress needs to take action to prevent corporate raiding of retirement plans.

For a real solution to the retirement issues that we face we need to move to a society with broad ownership and shared wealth. As James Madison warned: "the day will come when our republic will come to impossibility because its wealth will be concentrated in the hands of the few. When that day comes we must rely on the wisdom of the best elements in the country to readjust the laws of the nation to the changed conditions." The day has come when the wealth divide has become so great that laws must be put in place to bridge the chasm --or we have before us the roots of our undoing.

http://www.counterpunch.org/zeese02162005.html

[EVDebs]

1. DUers need to discuss Wealth Concentration in America in a permanent

DU site, or at least post that information for continued enlightenment of all.

[Disfronted]

2. This sentence is horribly misleading.

"Currently, 6.2 cents out of every dollar of salary is taxes for Social Security up to $90,000 --a limit put in place in 2003."

That makes it sound like:

a) The current administration set the limit on salary to be taxed
b) The limit is a recent invention

When in reality the limit has always been there, and is properly indexed.

Besides that, the article seems meandering and unfocused - talking about everything from CEO pay to corporate governence. Don't get me wrong, it makes some excellent points about the growing wealth divide and the danger it poses, but I think the solution should be focused more on increasing the wealth of the poor than decreasing the wealth of the rich.

The solution in the article (heavily tax all fortunes above $500 million) would be excellent at reducing the wealth of the super-wealthy, but would not do much to help the poor. What I would rather see is a heavy progressive income tax (focusing say on those making more than $1,000,000) with the proceeds used to fully fund social security as it is and take the rest and use it to set up everyone in America with an IRA, with automatic additions every year on a progressive scale. Over time, that would not only limit the ability of the super-rich to concentrate wealth but also provide everyone in America with a real retirement account and dramatically raise the net worth of the poor.