is inequality a big problem in America, or not?

[hfojvt]

I agree with Robert Reich that it is http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=439&topic_id=1884480

Yet, Obama's trickle down jobs plan will definitely make our inequality worse.

Obama proposes $173 billion in social security tax cuts. Of that big pile of money (which could create 5.8 million jobs if you just hired people directly at $30,000 a year)

$46.34 billion goes to the richest 10% of Americans.

A mere $21.3 billion goes to poorest 40%.

That's even before the other shoe drops, and Obama announces how he will pay for it with spending cuts that the Republican House will vote for. Spending cuts that are almost guaranteed to take benefits and services away from those in the bottom 20%.

Then there's the employer side of it, the supposed "small business tax cuts" which is a mantra we usually hear from Republicans. Just like Republicans, most of the benefits of this proposal go to big businesses.

I have myself owned two small businesses. The first was a bookstore that I created and ran for 7 years in a small town. Although I was on main street in the downtown, I never had more than $20,000 in yearly sales. I had to work another full time or part-time job to keep the doors open. The second was a laundromat which I foolishly bought in an even smaller town. It never took in more than $100 a week and also never made a dime in profit.

Those are my idea of small businesses. A business with a payroll of $5,000,000 is pretty huge from where I sit. That's like 250 of my bookstores just for the payroll, not to mention their gross revenue.

Under Obama's proposal every business, including Wal-mart, with more than $5,000,000 in payroll gets a tax break of $155,000. That's over ten times my annual salary going to rich business owners and rich corporations. Most of those businesses with $5 million in payroll have owners who are doing pretty well. It's simple math. If you have employees making $50,000 a year then 100 of them will give you a payroll of $5 million. If you make $1 in profit from every hour they work, then you make $200,000 from their labor.

Under this plan, bigger businesses get bigger breaks. The payroll of $5 million gets a $155,000 break, the payroll of $60,000 gets a $1,860 break. And if a business adds jobs, as corporations like Wal-mart and Dollar General probably will, then they get a $1,550,000 break (since it goes up to $50 million in payroll, although I am not clear if that is just new payroll, or all payroll).

Again, that is a transfer up. Bigger businesses get bigger breaks than smaller businesses. An unemployed person gets a $20,000 a year job while his employer gets a $155,000 a year tax break.

Finally, this plan continues to promote basic REPUBLICAN ideas on taxes. If tax cuts (even for the rich) create jobs, like Republicans have claimed for decades, then clearly the reverse must be true as well, that tax increases (even on the rich) will destroy jobs. As Obama flies around the country delivering this message, he might as well be campaigning for Grover Norquist and the "no tax increases" pledge. Obama went big, but with big tax cuts for the rich and a big Republican message. I guess we are all supply-siders now.

[Vincardog]

1. Net recommendation: +1 votes (Your vote: +1)

[hfojvt]

18. I like your icon, and this speech still seems apropo

http://journals.democraticunderground.com/hfojvt/166

[mmonk]

2. Considering we are the new third world poster child, yes.

[Turbineguy]

3. I would not say "big"

I would say "The Major Problem".

But at the end of the day Obama has to have a plan that will pass congress in the short term to get to a long term fix. Under a straight republican doctrine we don't have to worry about the long term because there won't be one.

[TheKentuckian]

6. Plans that don't work and make structural issues worse aren't solutions over any term

They typically will work to make future efforts less likely as credibility takes a nosedive.

[primavera]

19. +1, n/t

[hfojvt]

8. no he doesn't

the long term fix is to stop electing Republicans to Congress. However, it becomes harder to do that when Democrats also will not fight for the bottom 80%. Obama's plan basically concedes the economic argument to Republicans. Suddenly Obama is calling on working people to fight for tax cuts for the rich. (Just like Bush did, btw - "Next week, I will travel to New Mexico, Nebraska and Indiana to address the nation's hardworking, small business owners, families and investors. My message to them will be simple: the surest way to grow this economy and create jobs is to leave more money in the hands of the people who earn it.
I urge every citizen to participate in this important debate and to make your voice heard. Explain to your local representative or your senators what tax relief would mean to your family and your business, and please tell the members of Congress why our economy needs that relief now." George W. Bush May 10, 2003)

Obama had the option of presenting a plan that really would have helped the bottom 80% Let Republicans defeat it and demonstrate that they don't care about the bottom 80%. THEN, he could accept some trickle down crap that they would pass. Instead, he presented a plan that favors the top 20%, showing me, at least, that the Democratic Party doesn't give a damn about the bottom 80% either.

[Claudia Jones]

14. good comments

Good comments, and I recommended your thread. I would, however, like to make some comments about your statements that "the long term fix is to stop electing Republicans to Congress" and that "it becomes harder to do that when Democrats also will not fight for the bottom 80%." I think you have this arranged backward. Fighting for the bottom 80% is the long term fix, and electing any particular politicians is an effect of that, a subordinate concern. I am not saying that this should in my opinion be the case, rather that it is in fact the case.

In the 1840's and 1850's many people advocated a similar approach and said that the long term fix was to stop electing Democrats to Congress and to support the Whigs, and that the Whigs made this more difficult by failing to strongly oppose slavery. All of the same rhetoric was used that we hear today - the Whigs were much better than the Democrats and "what do you want? President Buchanan???" Abolitionists were accused of being impatient, of being perfectionists, of being negative, etc. The demands for loyalty to the Whig party were presented as opposition to slavery but they were used for the purpose of shutting down, marginalizing and silencing the Abolitionists. The practical effect of placing partisan loyalty first and Emancipation subordinate to that was to perpetuate slavery, not end it. This is not to say that voting Whig was not the better alternative to voting Democratic, nor was it to say that all Whig politicians were "bad." Rather, the important thing is that prioritizing partisan loyalty above the effort to change conditions is counterproductive. It works against the results we say we are working toward, and can also destroy the political party we claim to be "supporting." Demands for loyalty to and support for a political party first and foremost, can be, have been, are are being used for nefarious purposes - to thwart us and to prevent change.

[hfojvt]

17. the point is that Republicans never will represent the bottom 90%

so they need to be defeated.

Unfortunately, many Democrats in office will not represent the bottom 90% either. They may claim to in speeches, but in actual practice, they don't fight for us.

Now you imagine that a labor party will defeat those Democratic incumbents and grow into a major 2nd party just like the Republican Party did vis-a-vis the Whigs some 150 years ago.

However, if this labor party is gonna win elections, then why not start in the primaries. If you cannot win in the Democratic Primary, with voters who presumably care about the bottom 80%, then what chance do you have in the General election?

[Claudia Jones]

22. move it out of the realm of partisan politics

Elections and partisan politics are the effects of social and political changes, not the cause of change. A strong independent Labor movement would drive any and all parties far to the left. Other wise, no politicians in any party will have much incentive to do anything for the bottom 80%.

[AverageJoe90]

10. As disappointed as I have been, you are ultimately right.

A little short-term ass-kissing with the full intent to make things work in the long run is alright with me. =)

[TheKentuckian]

24. There is no reasonable long term plan to make things right in the long term

and the "short term ass kissing" plays into the very structural failings that created the problem.

Digging a deeper hole is not the way out of a deep hole.

A plan like

1. Kiss ass.

2. "Shared sacrifice" when the bottom 40% don't have 10% of the wealth and resources.

3. ???????

4. Things are made right.

is happy horseshit

[FSogol]

4. Obama's trickle down job's plan? Unrec. n/t

[hfojvt]

5. well in my view

$46 billion for the top 10% and $155,000 tax cuts for big businesses is the very definition of trickle down.

[FSogol]

7. In my view you are taking a blog written before the speech and conflating it

a plan outlined in the speech. The two ideas are not the same and the speech (and thus Obama's plan) are not trickle down.

[mmonk]

9. It doesn't take a blog to realize it is a problem.

Of the 32 major industrialized countries, we are either next to last or tied for last in income equality.

[hfojvt]

15. I guess after that awesome speech

that that is no longer true.

All we needed to eliminate inequality was a rousing speech calling on all Americans to DEMAND tax cuts for the rich and for big businesses.

What do we want?

Tax cuts (for the rich)!!!

When do we want it?

Right now!!

What do we want?

Tax breaks (for big business)!!

When do we want it?

Right now!!!


Hmm, maybe it works better if you do it like Obama, and don't tell people about the parts behind the parentheses.

Even now, his supporters are starting to demand "pay no attention to those facts behind the curtain!! The great and powerful Oz-bama has spoken!!!"

[hfojvt]

11. what blog?

I linked to a post on DU which said "our real problem is increasing inequality"

and then I did my own math, using tax calculations from Citizens for Tax Justice, showing that Obama's plan increases inequality.

With $46 billion for the top 10% and less than half of that for the bottom 40%, I would say that is undeniable.

Trickle down was the theory that tax cuts for the rich would trickle down and help the poor by creating economic growth, and that is exactly what the tax cut portions of Obama's plan are. Instead of directly creating jobs, it gives money to the rich and claims that economic stimulus will create economic growth ...

Sad, but true, the emperor is wearing trickle down underwear.

[FSogol]

12. Maybe I'm referring to the blog in the post to linked to?

:shrug:

[hfojvt]

13. yeah, and like I said

my post had nothing to do with that blog, except for agreeing with the title "Robert Reich: Why Inequality is the Real Cause of Our Ongoing Terrible Economy"

[Romulox]

16. The biggest. K/R. nt

[hfojvt]

23. I seem to have stalled out at 11 though

[Zax2me]

20. Haven't heard that in Obama speeches too much.

So I guess not.

[hfojvt]

21. well not since the primary election anyway

http://www.washingtonpost.com/wp-dyn/content/article/2007/11/07/AR2007110702521.html

"But he (Obama) argued that it will take more than replacing Bush with a Democrat next year to bring about the changes needed."

Yeah, no kidding Obama, you need to actually let the Bush tax cuts expire and stop proposing new tax cuts for the rich. You need to change the policies and the rhetoric.

[Nikia]

25. Of course

It seems that every piece of legislation is really meant to help the rich. We can only hope that someday Americans will someday see through all the propaganda. It has happened yet though.

[hfojvt]

26. but what are we supposed to do when we see through the propaganda?

We already voted for change and got more of the same.

But right now it seems like a majority of DU strongly supports this jobs plan.

[LWolf]

27. It's a problem, and Obama's jobs plan is a disaster. nt

[Literate Dragon]

28. Say WHAT?

OK, look. First of all, it's not "trickle down" unless the tax cuts are targeted to the very rich, and I don't mean the top 10% I mean the top 1%, the owner class, the ones Republicans are fond of calling "job creators." When you focus on differences in income below that level and consider THAT to be the "inequality" the country has a problem with, you are being diverted. The problem is that the richest 1% of Americans haul in almost 25% of the aggregate income, not that an experienced computer programmer makes more money than a McDonald's burger-flipper. Both the programmer and the burger-flipper are not among the rich, they're among the "everyone else."

Secondly, you are calling something a "transfer up" that isn't. A transfer up is when someone at the top gains and someone below the top loses, not when someone way below the top gains but someone not so far below the top gains more.

And third, this is not trickle down, it's trickle up, because it starts with putting money in the pockets of people who will use it to buy things rather than in the pockets of people who will invest it. Because meaningful, job-creating investment happens in response to consumer demand, not because money is burning a hole in the pockets of investors.

The rich -- I mean the real rich, not the not-as-poor-as-I-am people that you seem to be confusing with them -- will gain very little from this tax cut, and most of them will gain absolutely nothing, because all of their money comes from investments and capital gains rather than from employment. Even those who do have paid jobs, like the CEOs of big corps, will only gain a tiny percentage of their total income, because the on-paper pay for those jobs is only a small part of their income to begin with and they're taxed for SS only on a fraction even of that.